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San Francisco Public Library 



GoveriiiTient information Center 
San Fiancisco Pcblic Library 
100 Larkin Staet, 5th Floor 
San Francisco, CA 94102 

REFERENCE BOOK 



Not to be taken from the Library 



m 



SAN FRANCISCO PORT COMMISSION 

Rodney Fong, President 

Stephanie Shakofsicy, Vice President 

Kimberly Brandon, Commissioner 

Michael Hardeman, Commissioner 

Ann Lazarus, Commissioner 

Monique IVIoyer, Executive Director Amy Quesada, Commission Secretary 

Phone: 415-274-0400; Fax: 415-274-0412 Phone: 415-274-0406; Fax: 415-274-0412 

AGENDA 

TUESDAY, JULY 14, 2009 

2:00 P.M. CLOSED SESSION 

3:15 P.M. OPEN SESSION 

PORT COMMISSION HEARING ROOM, SECOND FLOOR 

FERRY BUILDING, SAN FRANCISCO, CA 94111 



The Port Commission Agenda as well as Staff Reports/Explanatory Documents available to the 
public and provided to the Commission are posted on the Port's Website at www. sf port, com. 
The agenda packet is also available at the Pier 1 Reception Desk. 

If any materials related to an item on this agenda have been distributed to the Port Commission 
after distribution of the agenda packet, those materials are available for public inspection at the 
Port Commission Secretary's office located at Pier 1 during normal office hours. 



07-10-09P04:07 RCVD 

1 . CALL TO ORDER / ROLL CALL 

2. APPROVAL OF IVIINUTES - June 9, 2009 



GOVERNMENT 
DOCUMENTS DEFT 



3. PUBLIC COMIVIENT ON EXECUTIVE SESSION ^^^ ^ ^ ^^^^ 

4. EXECUTIVE SESSION SAN FRANCISCO 

PUBLIC LIBRARY 
A. Vote on whether to hold closed session to confer with Legal Counsel and 
Real Property Negotiator. 

(1 ) CONFERENCE WITH LEGAL COUNSEL REGARDING EXISTING 
LITIGATION MATTERS: 

a. Discuss existing litigation matters pursuant to California Government 
Code Section 54956.9 and San Francisco Administrative Code 
Section 67.10(d) (3 cases; Information and Action Items): 



A07 142009 



-1- 



3 1223 08679 2950 



• In re Pier 38 Maritime Recreation Center. Inc. (Debtor) . U.S. 
Bankruptcy Court, Northern District of California, San Francisco 
Division, Chapter 1 1 (Case No. 07-31444 DM 1 1 ), and Pier 38 
Maritime Recreation Center. Inc. and Carl Ernst Jr. v. City and 
County of San Francisco: Port Commission of San Francisco 
(Adversary Proceeding No. 07-31443). 

• City and County of San Francisco v. Carl Ernst. Jr.. and Pier 38 
Maritime Recreation Center. Inc.: San Francisco Superior Court 
(Case No. CUD-07-621476) 

(2) CONFERENCE WITH REAL PROPERTY NEGOTIATOR - This is 
specifically authorized under California Government Code Section 
54956.8. This session is closed to any non-Citv/Port 
representative.* 

a. Property : Pier 15/17 (Embarcadero at Green Street) 

Person Negotiating : Port: Byron Rhett, Deputy Director, Planning and 

Development 

*The Exploratorium: Dennis Bartels 

Under Negotiation: Price ^Terms of Payment X_Both 

An executive session has been calendared to give direction to staff 
regarding real estate negotiations for Port property located at Pier 
15/17. 

5. ANNOUNCEMENT OF PROHIBITION OF SOUND PRODUCING DEVICES 
DURING THE MEETING 

Please be advised that the ringing of and use of cell phones, pagers, and similar 
sound-producing electronic devices are prohibited at this meeting. Please be 
advised that the Chair may order the removal from the meeting room of any 
person(s) responsible for the ringing or use of a cell phone, pager, or other similar 
sound-producing electronic device. 

6. EXECUTIVE 

A. Executive Director's Report 

• Installation of Commissioner Rodney Fong as Chair of the San Francisco 
Convention & Visitors Bureau - July 7, 2009 

• San Francisco Convention and Visitors Bureau's 2009 Silver Cable Car 
Award Winner - Fisherman's Wharf 

• San Francisco Giants County Fair - July 9 to 1 9, 2009 

• San Francisco Bay Conservation and Development Commission's Rising 
Tides Competition Exhibit at Ferry Building - July 9 to 19, 2009 

• Mexican Tall Ship Cuauhtemoc - July 1 3 to 1 7, 2009 at Pier 27 

• Ferry Plaza Farmer's Market Introduces New Thursday Market 

A07 142009 

-2- 



• Commendation for Bill Schiavo, Electrical Supervisor, on his retirement 

• Commendation for Patrick J. Gallagher, former President of Giants 
Enterprises 

7. CONSENT 

A. Request approval of the Fiscal Year 2009-10 Monthly Rental Rate Schedule, 
Monthly Parking Stall Rates, and Special Event and Filming Rates. 
(Resolution No. 09-34) 

B. Request authorization to advertise a Request for Proposals (RFP) soliciting 
Marine Structural and Civil Engineering Services for the Pier 43 Bay Trail 
Link. (Resolution No. 09-35) 

C. Request authorization to advertise for competitive bids for Contract No. 
2735, Security Lighting at Pier 80. (Resolution No. 09-36) 

D. Request to award Master Contract with URS/AGS Joint Venture for As- 
Needed Engineering and Related Professional Services in an amount not to 
exceed $1.5 million. (Resolution No. 09-37) 

E. Accept report on the Port's Annual Contracting Activity Report - Fiscal Year 
2008/09; Fourth Quarter Period April 1, 2009 through June 30, 2009. 

8. PLANNING & DEVELOPMENT 

A. Informational presentation on the July 2009 Draft Preferred Master Plan for 
Pier 70. 

B. Informational presentation regarding parking in the Ferry Building Area. 

9. FINANCE AND ADMINISTRATION 

A. Request approval of the Municipal Debt Policy for the Port of San Francisco. 
(Resolution No. 09-38) 

B. Request approval of the Port's Proposed 2009/10 Revenue Bond Projects. 
(Resolution No. 09-39) 

C. Request approval of a Reimbursement Resolution related to the Proposed 
Port Revenue Bond Issuance. (Resolution No. 09-40) 

10. NEW BUSINESS / AGENDA SETTING 

♦ New Business 

♦ Agenda Setting (Targeted Commission meeting, subject to change) 

• Request approval of the Port's Revised Annual Operating and Capital 
Budgets for Fiscal Year 2009-10 (August 11, 2009) 

A071 42009 

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• Informational presentation regarding San Francisco Municipal 
Transportation Agency's Bil<e Plan as it relates to Port property (August 1 1 , 
2009) 

• Request approval of the Port's Interim Leasing Policy for Historic 
Structures (August 1 1 , 2009) 

• Request approval of Memorandum of Understanding between the San 
Francisco Public Utilities Commission and the Port regarding the North 
Shore Force Main Improvement Project (Embarcadero, Drumm and Spear 
Streets) including Seawall Lot 351 located at Washington and the 
Embarcadero (August 1 1 , 2009) 

• Request adoption of the required California Environmental Quality Act 
Findings and the Mitigation Monitoring and Reporting Program in 
connection with the lease, development and historic rehabilitation of Piers 
15 and 17 by The Exploratorium, a California not-for-profit corporation 
(August 11, 2009) 

• Request approval of the Lease Disposition and Development Agreement, 
Lease and Parking Agreement with The Exploratorium, a California not-for- 
profit corporation; request approval of the Tripartite Agreement with 
Baydelta Maritime, Inc. and The Exploratorium for relocation of Baydelta 
Maritime Inc.'s operations from Pier 15 to Pier 17; request approval of 
Schematic Drawings and of Amendments to the Waterfront Land Use Plan 
(August 11, 2009) 

• Request authorization to award Construction Contract No. 2719 for Pier 45 
Drainage Improvements and Installation of Pumpout Manifold for 
Discharged Herring Gurry to Valentine Corporation in the amount not to 
exceed $1,766,074 (August 11, 2009) 

• Informational presentation on the Implementation of the Port's Americans 
With Disabilities Act (ADA) Transition Plan (September 8, 2009) 

• Informational update on the Port's Facility Assessment Program 
(September 8, 2009) 

• Update on the Port's 2008 Clean and Safe Neighborhood Parks General 
Obligation Bond Program (September 8, 2009) 

• Informational presentation regarding proposed water taxi service at the 
Port of San Francisco (September 8, 2009) 

• Request approval of Self-Operation and Maintenance of Foreign Trade 
Zone (September 8, 2009) 

• Request authorization to award two (2) three-year leases for surface 
parking: Bid Opportunity A: Seawall Lot 301 commonly known as the 
Triangle Parking Lot, bounded by Taylor Street, Jefferson Street, and 
Powell Street and SWL 314 bounded by the Embarcadero, Bay Street, and 
Kearny Street; and Bid Opportunity B: Seawall Lots 322-1 bounded by 
Front Street and Broadway, SWL 323 bounded by Davis Street and the 
Embarcadero, SWL 321 bounded by Front Street, Green Street and the 
Embarcadero and SWL 324 bounded by Davis Street, Front Street and the 
Embarcadero, all located in the northern waterfront (September 8, 2009) 

• Request authorization for the Executive Director to execute Amendment 
One to the Transit Shelter Advertising Agreement with Clear Channel 



A07 142009 



Outdoor, Inc. and the San Francisco Municipal Transportation Agency. 
(September 22, 2009) 

• Informational presentation regarding Lease No. L-14630 with D & G 
Company, LLC, for a fifteen and one half-year restaurant lease for 
premises located at 300 Jefferson Street subject to Port Commission and 
Board of Supervisors approval, and companion Sidewalk Encroachment 
License No. 14651 (Date to be determined) 

• Informational presentation on development opportunities for Seawall Lot 
330 (located on The Embarcadero at Beale and Brannan Streets) (Date to 
be determined) 

• Request authorization to enter into an Exclusive Negotiation Agreement 
with Seawall Lot 337 Associates, LLC to explore a mixed-use development 
project at SWL 337 and Pier 48 (Date to be determined) 

• Request authorization to enter into a Memorandum of Understanding with 
the San Francisco Municipal Transportation Agency for the Port of San 
Francisco to relinquish its rights to cargo freight rail service north of Cesar 
Chavez along Illinois Street (Date to be determined) 

11. PUBLIC COMMENT 

Public comment is permitted on any matter within Port jurisdiction and is not limited 
to agenda items. Public comment on non-agenda items may be raised during New 
Business/Public Comment. A member of the public has up to three minutes to 
make pertinent public comments before action is taken on any agenda item and 
during the new business/public comment period. It is strongly recommended that 
public comments be submitted in writing so they can be distributed to the 
Commissioners for their review. Please fill out a speaker card and hand it to the 
Commission Secretary. If you have any question regarding the agenda, please 
contact the Commission Secretary at 274-0406. 

12. COMMUNICATIONS 

Communications to the Port Commission from June 4. 2009 to Julv 9. 2009: 

• From Jacob Park, SF Bay Railroad; Lonnie Francis, ILWU; Robert Waterman, 
Metro Ports; Thomas Hart, Sheedy Drayage Company and Jim Lazarus, SF 
Chamber of Commerce; copy of a letter to Mayor Newsom regarding freight rail 

• From the Potrero Boosters Neighborhood Association, copy of The Potrero 
Community Voice newsletter 

• From David Parquet, Pattern Energy Group, regarding purchase of Babcock & 
Brown's North American energy development team and development assets 

13. ADJOURNMENT 



A07 142009 

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AUGUST/SEPTEMBER 2009 
CALENDAR OF UPCOMING PORT MEETINGS - OPEN TO THE PUBLIC 



DATE 


TIME 


GROUP 


August 1 1 


2:00 p.m. 


Closed Session/Port Commission 




3:15 p.m. 


Open Session 


Sept. 8 


2:00 p.m. 


Closed Session/Port Commission 




3:15 p.m. 


Open Session 


Sept. 22 


2:00 p.m. 


Closed Session/Port Commission 




3:15 p.m. 


Open Session 


NOTES: 







LOCATION 

Port Commission Room 
@ Ferry Building 

Port Commission Room 
@ Ferry Building 

Port Commission Room 
@ Ferry Building 



The San Francisco Port Commission meets regularly on the second and fourth Tuesday of the 
month at 3:15 p.m., unless otherwise noticed. The Commission Agenda and staff reports are 
posted on the Port's Website @ www.sfport.com. Contact Amy Quesada at 274-0406. 

The Fisherman's Wharf Waterfront Advisory Group (FWWAG) meets regularly on a bi-monthly 
basis, on the third Tuesday of the month. The regular meeting time and place is 9:00 a.m. at 
Scoma's Restaurant, Pier 47 at Fisherman's Wharf. Contact Michael Nerney @ 274-0416 or 
michael.nerney@sfport.com 

The Maritime Commerce Advisory Committee (MCAC) meets on a quarterly basis, on the third 
Thursday of the month, from 1 1 :30 a.m. to 1 :00 p.m. @ Pier 1 . Contact Jim Maloney @ 274- 
0519 orjim.maloney@sfport.com 

The Mission Bay Citizens Advisory Committee meets regularly on the second Thursday of the 
month, from 5:30 to 7:30 p.m. at the Mission Bay Visitor Center (255 Channel Street). Contact 
Catherine Reilly, Assistant Project Manager, Redevelopment Agency, @ 749-2516 or Catherine 
Reilly/REDEV/SFGOV@SFGOV 

The Northeast Waterfront Advisory Group (NEW AG) meets regularly on a bi-monthly basis on 
the first Wednesday of the month from 5:00 p.m. to 7:00 p.m. in the Bayside Conference Room 
@ Pier 1. Contact Jonathan Stern @ 274-0545 orjonathan.stern@sfport.com 

The Central Waterfront Advisory Group (CWAG) meets monthly on an as-needed basis, 
generally on the third Wednesday of the month from 5 to 7 p.m. in the Bayside Conference 
Room at Pier 1. Contact Mark Paez @ 705-8674 or mark.paez@sfport.com 

The Rincon Point-South Beach Citizens Advisory Committee meets on a quarterly basis, from 
5:00-7:00 p.m. at the South Beach Yacht Club (Pier 40 on The Embarcadero). Contact 
Catherine Reilly, Assistant Project Manager, Redevelopment Agency, @ 749-2516 or 
Catherine.Reilly/REDEV/SFGOV@SFGOV 

The Southern Waterfront Advisory Committee (SWAC) meets every last Wednesday of the 
month from 6:15 to 8:15 p.m. Location to be determined. Contact David Beaupre @ 274-0539 or 
david.beaupre@sfport.com 

The Waterfront Design Advisory Committee (WDAC) meets jointly with the Design Review 
Board of the Bay Conservation and Development Commission on the first Monday of the month 
at BCDC, 50 California Street, Rm. 2600, at 6:30 p.m. The Committee meets as needed on the 
fourth Monday of the month at 6:30 p.m. in the Bayside Conf. Rm. @ Pier 1 . Contact Dan 
Hodapp @ 274-0625 or dan.hodapp@sfport.com 



A07 142009 



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ACCESSIBLE MEETING INFORMATION 

EMBARCADERO ELEVATOR TO BE CLOSED - MAY 4, 2009 TO AUGUST 2009 

Please be advised that on Monday, May 4, 2009, BART will close the Embarcadero 
BART Station street-level elevator in order to replace the structure which houses 
the elevator entrance on the street level. The elevator will be shut down for 
approximately 3-1/2 months during this construction-until August 2009. People 
who rely on the elevators to enter and exit at Embarcadero should exit at 
Montgomery Station during this period. 

ALTERNATIVES TO EMBARCADERO: 

While the Embarcadero Street Elevator is closed, BART and Muni riders should exit the 
systems at Montgomery Street BART/Muni Station. 

The Montgomery Station elevator is located on Market and Sutter, approximately 3-1/2 
blocks from the location of the Embarcadero Station street elevator. If riders are unable 
to proceed from Montgomery under their own power, they can take any one of the 
following Muni lines which stop on Market Street near both Embarcadero and 
Montgomery: 

2 - Clement 
7 - Haight 
21 - Hayes 
31 -- Balboa 

For information about the project or transit alternatives, contact the following: 

BART Transit Information 

(415) 989-BART / (925) 676-BART / (510) 465-BART 

TTY (510) 839-2220 

San Francisco 31 1 Customer Service Center 
311 / (415) 701-2311 /TTY (415) 701-2323 

You can also visit BART online: www.bart.qov or www.sfmta.com . 

If you need additional transportation planning assistance or would like information about 
paratransit during this project, call BART Accessible Services at (510) 464-6184 or Muni 
Accessible Services at (415) 701-4485 / TTY (415) 701-4730. 



A071 42009 



FERRY BUILDING: 

The Port Commission Hearing Room is located on tlie second floor of the Ferry 
Building. The main public entrance is from the west (Embarcadero) side and is served 
by a bank of elevators adjacent to the historic staircase. Accessible public restrooms 
are on the first floor at the northeast end of the building as well as on the second floor 
across the lobby from the Port Commission Hearing Room. The main path of travel to 
the Port Commission Hearing Room is equipped with remote infrared signage (Talking 
Signs). The Port Commission Hearing Room is wheelchair accessible. Accessible 
seating for persons with disabilities (including those using wheelchairs) is available. The 
closest accessible BART and MUNI Metro station is Embarcadero located at Market & 
Spear Streets. Accessible MUNI lines serving the Ferry Building area are the F-Line, 9, 
31, 32 and 71. For more information about MUNI accessible services, call (415) 923- 
6142. The nearest accessible parking is provided in the following off-street pay lots: 

A) 3 spaces in the surface lot on the west side of the Embarcadero at Washington St. 

B) Hourly and valet parking in the Pier 3 lot. This lot is accessed through the Pier 3 
bulkhead building entrance on the east side of the Embarcadero. This lot is located 
on the pier deck; adjacent to the ferry boat Santa Rosa. 

Additional covered accessible off-street pay parking is available in the Golden Gateway 
Garage, which is bounded by Washington, Clay, Drumm and Battery Streets. Entrance 
is on Clay St. between Battery and Front Streets. There is no high-top van parking. 
Metered street parking is available on the Embarcadero, Washington, Folsom & Drumm 
Streets. 

PIER1: 

The Port's fully accessible offices are in the west end of Pier 1 . There are two public 
entrances; the main entrance on the west (Embarcadero), and the Port History walk 
entrance on the south apron. Each of these entrances is provided with an automatically 
operated door. Both entrances lead to the Bayside conference rooms. Accessible 
public restrooms, drinking fountains, payphone and TTY are on the first floor near the 
main entrance. The public spaces of the Port's offices are equipped with remote infrared 
signage (Talking Signs) identifying all primary entrances, paths of travel, meeting rooms 
and amenities. Accessible seating areas and assistive listening devices will be available 
in the Bayside Conference rooms. 



A07 142009 



Accessible meeting information policy: 

In order to assist the City's efforts to accommodate persons with severe allergies, 
environmental illness, multiple chemical sensitivity or related disabilities, attendees at 
public meetings are reminded that other attendees may be sensitive to various chemical 
based products. Please help the City to accommodate these individuals. 



A sign language interpreter and alternative format copies of meeting agendas and other 
materials can be provided upon request made at least 72 hours in advance of any 
scheduled meeting. Contact Wendy Proctor, Port's ADA Coordinator, at 274-0592, the 
Port's TTY number is (415) 274-0587. 

Know Your Rights Under the Sunshine Ordinance: 

Government's duty is to serve the public, reaching its decisions in full view of the public. 
Commissions, boards, councils and other agencies of the City and County exist to 
conduct the people's business. This ordinance assures that deliberations are 
conducted before the people and that City operations are open to the people's review. 
For more information on your rights under the Sunshine Ordinance (Chapter 67 of the 
San Francisco Administrative Code) or to report a violation of the ordinance, contact 
Frank Darby by mail: Sunshine Ordinance Task Force, 1 Dr. Carlton B. Goodlett Place, 
Room 244, San Francisco CA 94102-4689; by phone at (415) 554-7724; by fax at (415) 
554-7854 or by email at sotf(a)sfqov.orq . Citizens interested in obtaining a free copy of 
the Sunshine Ordinance can request a copy from Mr. Darby or by printing Chapter 67 of 
the San Francisco Administrative Code on the Internet, at 
http://www.sfgov.org/sunshine. 

NOTICES 

Prohibition of Ringing of Sound Producing Devices: 

The ringing of and use of cell phones, pagers, and similar sound-producing electronic 
devices are prohibited at this meeting. Please be advised that the Chair may order the 
removal from the meeting room of any person(s) responsible for the ringing or use of a 
cell phone, pager, or other similar sound-producing electronic device. 

Lobbyist Registration and Reporting Reguirements: 

Individuals and entities that influence or attempt to influence local legislative or 
administrative action may be required by the San Francisco Lobbyist Ordinance (SF 
Campaign & Government Conduct Code Sections §2.100 - 2.160) to register and report 
lobbying activity. For more information about the Lobbyist Ordinance, please contact 
the San Francisco Ethics Commission at 30 Van Ness, Suite 3900, San Francisco, CA 
94102, phone (415) 581-2300 or fax (415) 581-2317; web site: www.sfqov.orq/ethics . 



A07 142009 



i 



PORTof- 

SAN FRANCISCO 




MEMORANDUM 

July 6, 2009 

TO: MEMBERS, PORT COMMISSION 

Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Kimberly Brandon 
Hon. Michael Hardeman 
Hon. Ann Lazarus 

FROM: Monique Moyer 

Executive DirectX 

SUBJECT: Request approval of the Fiscal Year 2009-1 Monthly Rental Rate Schedule, 
Monthly Parking Stall Rates, and Special Event and Filming Rates 

DIRECTOR'S RECOMMENDATION: Approve Attached Resolution 

This item was presented as an information item at the June 9, 2009 Port Commission 
meeting and is now before the Port Commission for approval. No material changes 
have been made to the rates in the intervening time. 

MONTHLY RENTAL RATE SCHEDULE 

On September 8, 1993, the Port Commission (Resolution No. 93-127, as amended by 
Resolution 93-135) delegated authority to the Executive Director to approve and 
execute leases and Memorandums of Understanding on behalf of the Port, provided 
that the terms of said leases met certain parameters as found in the Port's Leasing 
Policy. Contained within the 1993 delegated authority is a schedule of minimum rental 
rates for leases which can be executed by the Executive Director without Port 
Commission approval. Such delegated authority can only be executed under the 
following criteria: 

1 . The lease is for an office building or bulkhead office space, open or enclosed pier 
shed space, paved or unpaved open space, or open pier or apron space but is not 
for a retail use; 

2. Except for temporary uses (with terms not exceeding six (6) months), the use under 
the lease or license represents a like-kind use to the existing or the immediate prior 
use of the facility; 

THIS PRINT COVERS CALENDAR ITEM NO. 7A 



3. Port staff has authority to assign or sublease a Port Commission approved boilerplate 
Lease without Commission approval if the terms and conditions of the assignment or 
sublease are consistent with the September 1993 Resolution No. 93-127; 

4. The lease or license is for space included in the current Rental Rate Schedule adopted 
by the Port Commission, and the lease or license rent conforms to the Rental Rate 
Schedule; 

5. The tenant executes the Port's standard form lease with no alterations except for minor 
changes approved by the City Attorney or changes in insurance requirements approved 
by the City Risk Manager; 

6. The lease term does not exceed five (5) years, except those leases in the Fisherman's 
Wharf Seafood Center at Pier 45 Sheds B and D may have a maximum lease term of 
ten (10) years, (Port Resolution No. 94-122; Amended February 28, 2006, by 
Resolution No. 06-15); 

7. Port staff has the authority to issue tenant improvement allowances for floor and wall 
coverings if those credits do not result in the net rent over the term of the lease to be 
below the Minimum Net Effective Rental Rates found in the Rental Rate Schedule. 
Allowances for paint, up to a maximum of $2.50 per square foot, and for floor covering, 
up to a maximum of $2.50 per square foot, are allowable when: 1) new paint and/or 
floor covering is necessary in order to lease space in full service office buildings; and 2) 
Port staff is unable to perform such work prior to the proposed lease commencement 
date. These allowances are considered "landlord's work." Therefore, such work is not 
included in calculating the minimum Initial Lease Rental Rates; 

8. The lease may include one month of free rent for early entry for the construction of 
tenant improvements prior to the commencement of term; and 

9. Port staff provides a monthly report to the Commission indicating Leases, Licenses, 
and MOU's Executed Pursuant to Port Commission's Leasing Parameters Policy. 

The Port's Leasing Policy provides for an annual update of the Rental Rate Schedule. The 
Schedule sets ranges of minimum lease/license rental rates per square foot and ranges of 
minimum net effective rental rates per square foot (if any rent credits are to be provided) by 
type of use and facility for office and industrial space. The Port Commission last updated 
the Rental Rate Schedule on June 10, 2008, by Resolution No. Q7-40, attached hereto as 
Exhibit A. 

MARKET SUMMARY 

The San Francisco office market continued to weaken through the first quarter of 2009. 
The current economic crisis has taken its toll on all Bay Area commercial real estate 
markets. The Bay Area office market has taken the brunt of these negative effects, which 
has translated into fast-rising vacancy rates, a rapid growth in sublease space, reduction in 
rental rates, anemic leasing activity, and depletion in occupancy. 



The demand for space along the waterfront has softened less relative to that of the 
balance of San Francisco. The Port's office vacancy rate is about 12% which is in line with 
the citywide vacancy rate of approximately 14.6%. Port staff has reviewed available 
commercial data including market comparables of similarly situated properties to that of 
Port properties, the results of which are included in a table on page 4 of this report, San 
Francisco Office Submarket Overview 1Q2009. Port staff also reviewed Port leasing 
activity for the prior 12 months included as Exhibit B. This data demonstrates that the 
Port's current Rental Rate Schedule is generally in line with current market conditions even 
with the softening market. However, there are some rates, as indicated below, that Port 
staff is recommending to change or to establish a new rate category to better reflect the 
current market conditions. 

The Port contracted with CBRE Consulting, a third party consultant, to review the proposed 
Fiscal Year 2009-1 Monthly Rental Rate Schedule. CBRE concurs with the Port's Fiscal Year 
2009-10 recommendations. The CBRE report is attached to this staff report. 

Port staff continues to have the authority to negotiate higher rates than those found in the 
Rental Rate Schedule and, conversely, staff has the flexibility to quote rates in the mid-range 
or lower range of the Rental Rate Schedule when justified, for properties that may be 
physically sub-standard or oddly configured. In the majority of transactions, Port staff 
successfully negotiates rates above the Minimum Monthly Rent Parameters. 

Office buildings are classified according to a combination of location and physical 
characteristics. Class B and Class C buildings are always defined in reference to the 
qualities of Class A buildings. There is no formula for classification but rather buildings are 
evaluated subjectively. 

Class A office space can be characterized as buildings that have excellent location and 
access, attract high quality tenants, and are managed professionally. Building materials are 
of high quality and rents are competitive with other new buildings. Class A office buildings 
are usually located in central financial districts with higher-end amenities and lobbies. 
Class A office buildings are usually steel-framed and tall. Current rental rates for Class A 
office in San Francisco's Financial District average $3.02 per square foot per month or 
$36.24 annualized. In the submarket of Jackson Square/North Waterfront, rates are $3.25 
per square foot per month or $39.00 annualized. The Port does not directly manage any 
Class A office buildings. (Source: BT Commercial Office Report 1^^ Quarter 2009, and 
Coirnish & Carey 2009 Market Rate Summary). 

Class B buildings have good (versus excellent) locations, management, and construction, 
and tenant standards are high. Buildings should have very little functional obsolescence 
and deterioration. In practical terms, Class B buildings are usually newer, wood-framed 
buildings or older, former Class A buildings. Class B office buildings are usually three 
stories or less. The average San Francisco Class B office rents as of the 1Q 2009 range 
from $2.50 to $3.25 per square foot per month or $30.00 to $39.00 per square foot 
annually. 

Comparatively the average Port of San Francisco Class B office space for the period 1Q 
2009 ranges from $2.35 to $2.50 per month or $28.20 to $30.00 per square foot annually. 
Class C buildings are typically 15 to 25 years old but are maintaining steady occupancy. A 

-3- 



fair number of the Class C office spaces in the Port's inventory are not truly office buildings 
but rather walk-up office spaces above retail or service businesses. The average San 
Francisco Class C office space for the same period shows rental rates ranging from $2.09 
to $2.60 per square foot per month or $25.08 to $31 .20 per square foot annually. 

In the 1Q of 2009 the average Port of San Francisco Class C office space for the same 
period ranges from $2.25 to $2.70 per square foot per month or $27.00 to $32.40 per 
square foot annually. These rates are slightly higher than the City average by 
approximately 3%. 

The majority of Port managed office spaces primarily fall into the Class C category of office 
space with the exceptions of the Roundhouse Plaza, Pier 9, and Pier 26 Annex, which are 
considered Class B. Note that the Port's portfolio contains Class A space managed by 
Master Tenants and not subject to the Port's Rental Rate Schedule. 

San Francisco Office Submarket Overview 1Q 2009 



Submarket 


Net rentable 
area 


Total 
vacancy rate 


Class A 


Class B 


Class C 


Financial District 


27,160,376 


12.8% 


$3.59. 


$3.25 


$2.20 


S. Financial District 


20,185,328 


12.2% 


$3.50 


$3.00 


$2.10 


N.Waterfront & 
Jackson Square 


4,806,266 


12.7% 


$3.25 


$2.96 


$2.60 


Verba Buena 


3,260,036 


39.8% 


$3.17 


$2.92 


$2.09 


South Market 


2,613,337 


2.6%, 


$2.75 


$2.80 


$2.09 


Multimedia Gulch 


3,529,583 


36.4%> 


$3.17 


$2.90 


$2.40 


Mission Bay/China 
Basin 


1,206,000 


24.4%> 


$3.59 


n/a 


n/a 


Potrero Hill 


2,068,709 


13.6% 


$3.09 


$2.94 


$2.50 


Civic Center & Van 
Ness Corridor 


3,151,137 


5.25% 


$2.84 


$2.50 


$2.20 


Union Square 


3,776,028 


3.6% 


$3.25 


$3.05 


$2.57 



(Research Sources: BT Commercial Office Market Oven/iew 2009, Cornish & Carey Office 
Report 1Q 2009) 



INDUSTRIAL AND WAREHOUSE 

As economic conditions continue to take their toll on many Bay Area companies, the 



warehouse market also took a slight downturn in the 4 
Quarter 2009. 



th 



Quarter 2008 and into the 1 



St 



The Bay Area has a total of over 159 million feet of warehouse space, which is divided into 
four primary regions according to BT Commercial. The East Bay 1-80/880 Corridor has the 
majority of the warehouse space, then Santa Clara County and San Mateo County 
followed by San Francisco which represents approximately 12% of the total Bay Area 
warehouse space. 



-4- 



Submarket 


Building 
Base 


Direct 


Available Space 
Sublease 


Total 


Vacancy Rate 
Q1-09 01 -08 


Avg. Asking 
Rate (NNN) 


Mission/SOMA 


5.141.878 


124,940 





124,940 


2.4% 


2.4% 


$1.02 


3rd SI Cdr/Polrero Hill 


9,785,817 


375.837 





375.837 


3.8% 


3.8% 


$0.83 


Bayvisw 


4,359,440 


199.762 


8.800 


208.562 


4.8% 


4,8% 


$0.80 


Total San Francisco County 


19.287.135 


700.539 


8,800 


709,339 


3.7% 


2.3% 


$0.85 


Brisbane 


4,014,547 


285.585 


88,500 


374.085 


9.3% 


5.8% 


$0.82 


S San Francisco/ San Bruno 


17,468,381 


2.175.094 


112,076 


2,287,170 


13.1% 


6.0% 


$0.81 


Burlingame/ Millbrae 


3,902,835 
735,021 


281.795 

20,040 


28,351 


310,146 


7.9% 


6.2% 


$0.90 


San Mateo/ Foster City 





20,040 


2.7% 


1,1% 


$1.06 


Redwood City 


1.253,456 


102.198 


87,031 


189.229 


15.1% 


13.8% 


$0.67 


Belmont/ San Carlos 


3.271,768 


16.533 





16,533 


0.5% 


0.6% 


$0.86 


Menio Park 


1.258,362 


212.848 


11.904 


224.752 


17.9% 


0.0% 


$0.62 


Total San Mateo County 


31,904,370 


3,094,093 


327,862 


3,421,955 


10.7% 


5.4% 


$0.80 


Richmond 


5,376,644 


571.264 





571,264 


10.6% 


8.2% 


$0.33 


Berkeley 


1,853,085 


23.250 





23.250 


1.3% 


1.0% 


$0.79 


Emeryville 


1.086,153 


36.186 





36.186 


3.3% 


2.3% 


$0.53 


Oakland 


12,937,866 


562,795 


236,435 


799,230 


6.2% 


3.8% 


$0.43 


San Leandro 


14.825,117 


1,103,308 


98,883 


1.202,191 


8.1% 


8,4% 


$0.44 


Hayward 


18,846,218 


2,325.325 


374,521 


2,699,846 


14.3% 


5.9% 


$0.45 


Union City 


8,311,087 


1.029,498 


97,506 


1.127.004 


13.6% 


11.3% 


$0.44 


Newark 


3,986,761 


150.190 


48,960 


199,150 


5.0% 


5.2% 


$0.36 


Fremont 


8,011,039 


801,619 


63.164 


864,783 


10.8% 


4.6% 


$0.49 


Total 80/880 Corridor 


75,233.970 


6,603,435 


919,469 


7,522,904 


10.0% 


6.4% 


$0.44 


Sunnyvale 


1.848,665 


207,484 





207,484 


11.2% 


3,0% 


$0.57 


Santa Clara 


3,938,252 


269,952 


10,500 


280,452 


7.1% 


2.0% 


$0.58 


Morth San Jose 


9,472,556 


849,548 


56,820 


906.368 


9.6% 


4,5% 


$0.51 


3/Cenfral San Jose 


9.194,629 


343,800 


138,240 


482,040 


5.2% 


2,9% 


$0.44 


Viorgan Hill/Gilroy 


2,537.445 


242,991 





242.991 


9.6% 


9.1% 


$0.32 


Vlilpitas 


5,408,765 


496,023 


31,000 


527,023 


9.7% 


7,1% 


$0.42 


Total Santa Clara County 


32,400,312 


2,409,798 


236,560 


2,646,358 


8.2% 


4.5% 


$0.47 


1 


jrand Total 


158.825.787 


12,807,865 


1,492,691 


14,300,556 


9.0% 


5.3% 


$0.55 



Warehouse 

(Research Source: BT Commercial Warehouse Report 1 Q 2009) 

Port warehouse and industrial space demand has declined in general from a high of $0.85 
per square foot to $0.80 per square foot. In the 2Q of 2009 rents have leveled off or in 
some cases declined slightly at the Port. 



The Port's industrial properties have various levels of improvements including partitions, 
fencing, electrical service, plumbing, etc. The industrial/warehouse spaces are typically 
leased under "net" leases with space defined as "gross leasable area." 

The majority of Port warehouses are categorized as Class C. Those spaces lack loading 
docks, attached office space, non-permeable concrete floors, and share a common drive 
isle. Despite the limited infrastructure, the Port has been able to negotiate rental rates 
comparable to private landlords. The previous twelve month average rates have been 
$0.75 to $0.85 per sq.ft or $9.00 to $10.20 per sq.ft annually. This appears to be somewhat 
better than current rental market conditions. 



Proposed 2009-10 Month Rental Rate Schedule 

The Fiscal Year 2009-10 Monthly Rental Rate Schedule presented for Port Commission 
review and approval provides two sets of rental rate ranges. The first, entitled Minimum 
Initial Lease Rental Rates, represents the market rent range for the first year of the lease. 
The second, entitled Minimum Net Effective Rental Rates represents the net effective rent 
calculated and applied over the lease term after rent credits for flooring and wall coverings 
are amortized over the term of the lease. The proposed Monthly Rental Rate Schedule for 
Fiscal Year 2009-10 is attached hereto as Exhibit C. 

PROPOSED CHANGES TO 2009-10 MONTHLY RENTAL RATE SCHEDULE 

Port staff proposes changes to the Fiscal Year 2009-10 Monthly Rental Rate Schedule for 
office and industrial shed space consistent with the market rate review and determination. 
The following changes are proposed: 

1 . One month early entry for each year of lease term up to three months for the purpose 
space preparation. 

2. The following office properties are currently in low demand and are experiencing 
moderate vacancy rates. Staff recommends revising minimum monthly rents for these 
locations in recognition of minimal demand, moderate vacancy and a softening Port 
office market. 

Office Class B 



Item 

# 


Facility 


From Minimum 
Rate of sq. ft /month 


New 
Minimum $ 


a) 


Pier 33 72 North* 


n/a 


$2.50 



*Establishment of New Rate Parameter 



Office Class C 



Item 

# 


Facility 


From Minimum 
Rate of sq. ft /month 


New 
Minimum $ 


a) 


Pier 9 Studio/Office* 


n/a 


$2.00 


b) 


Pier 33 'A * 


n/a 


$1.75 


c) 


Pier 35 Interior office* 


n/a 


$1.75 


d) 


501 Cesar Chavez 


$1.80 


$1.50 


e) 


Office Storage at all facilities 


$1.10 


$1.00 



* Establishment of New Rate Parameter 



3. The following Industrial/warehouse shed and land properties generate minimal demand 
from prospective tenants and currently experience moderate vacancy rates. Real Estate 
staff recommends revising minimum monthly rents for these locations in recognition of 
minimum demand, moderate vacancy and a soft warehouse market. 



Pier Shed and Land 



Item 

# 


Facility 


From Minimum 
Rate of sq. ft 
/month 


Decreased to 
Minimum $ 


a) 


Piers 26-28 


$0.80 


$0.70 


b) 


Pier 50-54 'A 


$0.80 


$0.70 


c) 


Pier 80 


$0.75 


$0.55 


d) 


Pier 92, SWL 344 & 344 


$0.75 


$0.55 


e) 


Open Land North& South 


$0.26 


$0.20 


f) 


Paved Land North & South 


$0.28 


$0.22 


g) 


Improved Land North & South 


$0.30 


$0.25 


h) 


Piers 19, 19 72* 


n/a 


$0.65 


i) 


Pier 47 Shed* 


n/a 


$0.75 


J) 


SWL 302 Shed* 


n/a 


$0.75 


k) 


Facility 6019 (Armstrong Street)* 


n/a 


$0.55 



* Establishment of New Rate Parameter 

(Research sources: BT Commercial Market Overview 1Q 2009, TRI Commercial 2009; BT 
Commercial Warehouse Report 1Q 2009; Port Leasing Activity past 12 months, Cornish & 
Carey Office Report 1Q 2009, CB Richard Ellis 2009 Market Outlook) 

4. The rental rates at Pier 45 Fish Processing Center were adjusted in 2008. Port staff 
recommends only two adjustments and one new category rate in this section below. 

Improved Shed -Fish Wholesaling & Processing Space 



Item 

# 


Facility 


From Minimum 
Rate of sq. ft 
/month 


Decreased to 
Minimum $ 


a) 


Pier 45 Sheds 


$0.80 


$0.75 


b) 


Pier 45 Second Floor Mezz.* 


n/a 


$0.85 


c) 


Aprons 


$0.25 


$0.22 


* 


Establishment of New Rate Parameter 







(Research sources: Santa Cruz Harbor, Pilar Point Harbor, Spud Point Harbor, Morro Bay 
Harbor, Crescent City Harbor) 

5. Fisherman's Wharf Encroachment Permit Rates. 

On June 13, 2006, the Port Commission approved the revised Sidewalk and Airspace 
Encroachment Program which was amended on March 13, 2007. The rates were set and 
Real Estate staff proceeded to enter into a limited number of agreements with businesses 
and landlords on the south side of Jefferson Street. 



Airspace Permits 

The formula for determining the Airspace permits has proven to be confusing and difficult 
to manage in its current form. Port staff proposes to simplify the program by reducing the 

-7- 



five-tier rate schedule to a two-tier rate reflecting low and high density signage as shown on 
the table below. 

Sidewalk Permits 

This quarterly permit program established a rate of $60 per square foot per month ($720 
annually) for non-Port tenants whose businesses border on Port property. Real Estate staff 
recommend the rate be modified to reflect the current market. Recent comparables are 
$185 per square foot annually for stores on Jefferson St. and $60 for stores on Powell St. 
Since frontage is more valuable, $20 per square foot monthly ($240 annually) for prime 
retail frontage is both reasonable and fair. To reduce paperwork and management costs, 
the permit would have an annual term with an auto-annual rollover and be billable monthly. 
The current rate of $10 per square foot for tables and chairs would not change. 

Curb-space Permits 

Exclusive use white zones for passenger loading and unloading are offered at a rate of 
$40.00 per linear foot monthly. Non-exclusive use white zones are not charged and are 
used for general passenger loading and unloading. The MTA parking meter upgrade 
project will provide new exclusive curb-space leasing opportunities. Port staff recommends 
establishing a $40 per linear foot minimum rate for exclusive white zones for non-Port 
tenants who wish to have an exclusive white zone. No subleasing to retail operators will be 
permitted. 



Permit Type 


Current rent 


Proposed Rent 


Comments 


Airspace 


$20 to $100 per 
linear foot 
annually 


$40 and $80 per 
linear foot 
annually 


5-tier to 2 tier rent 
structure 


Sidewalk 


$720 per square 
foot annually 


$240 per square 
foot annually 


Monthly permit to 
annual permit 


Curb-space 


Varies 


$40 per linear foot 
monthly 


No subleasing 
permitted 



PARKING 



The Port operates a number of parking facilities where the Port leases individual parking 
stalls on a monthly basis (328 stalls). The majority of the stall holders are Port tenants. A 
map is attached that shows the location of those facilities at which the Port currently offers 
monthly parking. 

On June 10, 2008 the Port Commission approved a new Monthly Parking Stall Rate 
Schedule by Resolution No. 07-40. This Monthly Parking Stall Rate Schedule was 
approved by the Port Commission with the understanding that Port staff would present to 
the Port Commission, for its review and approval a revised rate schedule for monthly 
parking each fiscal year. Accordingly, staff herein presents this Monthly Parking Stall Rate 
Schedule for fiscal year 2009-10 for the Commission's review as included below. 

Since the last parking stall rate adjustments, the parking market has continued to slightly 
improve. Port staff recently conducted a survey of comparable parking facilities in the 
vicinity of Port property where the Port rents monthly parking stalls, attached hereto as 
Exhibit D. The survey determined that the monthly parking stall rates for Port facilities are 

-8- 



in line with current market rates. Therefore staff proposes modest incremental increases to 
the Monthly Parking Stall Rate Schedule because demand remains stable and the 
increases will keep pace with the market. 

Please note that the parking rates in this report do not include any City parking tax, 
currently 25%, which is paid by the stall holder and remitted by the Port to the San 
Francisco Tax Collector. 

PROPOSED CHANGES TO FY 2009-10 MONTHLY PARKING RATE SCHEDULE 



Site 


Type 


Current Rate 


Proposed Rate 


Increase 

(Tax 
Included) 


Rent 


Rent& 
Tax 


Rent 


Rent& 
Tax 


Agriculture 
BIdg 


Building Tenants 
Parking 


$308 


$385 


$316 


$395 


$10 


Pier 9 


Shed Parking 


$264 


$330 


$272 


$340 


$10 


Uncovered Parking 


$244 


$305 


$252 


$315 


$10 


Wharf J3 


Commercial Tenants 
Parking 

Restaurant Tenants 
Parking 


$244 
$160 


$305 
$200 


$252 
$164 


$315 
$205 


$10 
$5 


Fishing Industry 
Tenants Parking 


$60 


$75 


$60 


$75 


$0 


Pier 45, 
ShedC 


Commercial Tenants 
Parking 


$264 


$330 


$272 


$340 


$10 


Restaurant Tenants 
Parking 


$160 


$200 


$164 


$205 


$5 


Fishing Industry 
Tenants Parking 


$60 


$75 


$60 


$75 


$0 


Seawall Lot 
302 


Commercial Tenants 
Parking 

Restaurant Tenants 
Parking 


$260 
$160 


$325 
$200 


$268 
$164 


$335 
$205 


$10 
$5 


Sport Fishing Tenants 
Parking 


$96 


$120 


$96 


$120 


$0 


Seawall Lot 
303 


Commercial Tenants 
Parking 


$248 


$310 


$256 


$320 


$10 


Restaurant Tenants 
Parking 


$160 


$200 


$164 


$205 


$5 


Seawall Lot 
349 


Uncovered Parking 


$120 


$150 


$124 


$155 


$5 


Pier 80 


Admin BIdg 
Uncovered Parking 


$168 


$210 


$176 


$220 


$10 


Yard Uncovered 
Parking 


$120 


$150 


$124 


$155 


$5 


Pier 84 


Uncovered Parking 


$120 


$150 


$124 


$155 


$5 



Site 


— 1 

Type 


Current Rate 


Proposed Rate 


Increase 

(Tax 
Included) 


Rent 


Rent& 
Tax 


Rent 


Rent& 
Tax 


Pier 96 


Uncovered Parking 


$120 


$150 $124 


$155 


$5 


Pier 52 Boat 
Launch 


Uncovered Parking 


n/a 


n/a n/a 


$1 hr/ 
vehicles 


$1hr/vehicles 


Pier 52 Boat 
Launch 


Uncovered Parking 


n/a 


n/a n/a 


$5/4hrs 
w/boat 
trailer 


$5/4hrs 
w/boat trailer 



The Port makes available parking stalls at cost for its employees' vehicles. The parking lot 
operator at SWL 324 (Broadway lot) is required to provide forty parking spaces at SWL 324 
for Port employees at no cost to the Port. The Port will convert an additional 20 currently 
underutilized metered spaces on Davis Street for Port employee parking similar to that 
around City Hall. The Port receives $65 per space. The rate is equivalent to the cost of a 
MUNI Fast-Pass plus $10. 

PROPOSED PORT EMPLOYEES MONTHLY PARKING RATE FOR FY 2009/10 



Facility 


For 


Current 
Rate 


Proposed 
Rate 


Increa 
se 

(Tax 
Includ 

ed) 


Rate 


Rent 

& 

Tax 


Rent 


Rent 

& 

Tax 


Pier 72, Pier 
3 & Seawall 
Lot 351 


Port Commissioner, Executive 
Director 


$104 


$130 


$124 


$155 


$25 


Employees who have been 
granted a reasonable 
accommodation under the 
Americans with Disabilities Act 


$44 


$55 


$52 


$65* 


$10 


Seawall Lot 
324 


Employees assigned to Pier 1; 
parking available for one 
employee vehicle used for 
commuting 


$44 


$55 


$52 


$65* 


$10 


Pier 50 or at 
jobsite 


Employees assigned to Pier 50 
or whose collective bargaining 
agreement allows for free 
parking; one automobile space 
for vehicle used by the 
employee for commuting (no 
boats, trailers, three-axle 
vehicles, etc.) 


$0 


$0 


$0 


$0 


$0 



The annualized Monthly Parking Stall revenue is $352,608 as of May 1 , 2009. The 
annualized revenue based on the proposed rate will increase to $369,888 or 4.9%. 



-10- 



SPECIAL EVENTS AND FILMING 

The Port's seven and half (7.5) miles of waterfront property is a popular venue for special 
events and filming projects produced each year in the City. Among the most notable 
special events are Fleet Week, 4*^ of July Celebration and Fireworks, City Streets, KFOG 
Kaboom, New Years Eve, Giant's Fanfest and the Nike Women's Marathon. 

A number of major motion pictures and television series have been produced on Port 
property including; Trauma and Myth Busters. 

The Port is also very popular with advertisers that account for the majority of still photo 
shoots that occur at the Port. From elegant fashion and auto ads located at Pier 7 to the 
more urban industrial projects shot in the Southern Waterfront, the Port offers a variety of 
locations sought after by creative photographers. 

In order to standardize fees charged for various Port facilities, Port staff has established a 
Special Event and Filming Fee Schedule. The schedule is reviewed annually to reflect 
current market conditions and submitted to the Port Commission for re-approval. On June 
12, 2007 the Port Commission by Resolution No. 07-40 amended the Rental Rate 
Schedule to include the Special Event and Filming Fee Schedule. 

There are several recurring Special Events/Uses that have a strong Maritime or community 
connection to the Port of San Francisco and have customarily been given either a fee 
wavier or fee reduction by the Port Commission on an ad hoc basis. In order to streamline 
the administrative process and costs associated with preparing individual Commission 
Agenda Items for each event, staff recommends that the Port Commission approve the 
recommended fees for these events. 

1 . Proposed Fee Wavier: 4'^ of July Celebration; Fleet Week; City's New Years Eve 
Celebration, Madonna Del Lume, Miracle at Pier 48, and Project Homeless Connect; 

2. Proposed Fee Reductions: Small Boat Fishing Gear Swap Meet $300 versus $2,000 
and Delancey Street Christmas tree Lot, $3,528 versus $7,055. 

The methodology for deriving the fees described in the Special Events and Filming Fee 
Schedule is a combination of market research, continuous dialog with special events 
promoters and mostly the Port's own experience at negotiating fees. Because of the 
variety and unique characteristics of Port property, the Port has been able to set fees for 
special events and filming. 

The attached Special Event and Filming Schedule E reflects both a comparison of fees 
charged by the Port and other public venues in the City, such as athletic events and other 
entertainment venues managed by the Department of Parks and Recreation, film permits 
issued through the Film Commission, and rates charged for the Concourse Exhibition 
Center. 

In Fiscal Year 2008-09 special events and filming generated a combined total of $67,247 
in revenues to the Port (as of April 2009). Of this amount, special events generated 65,065 
and filming $2,182. 

-11- 



PROPOSED FY 2009-10 SPECIAL EVENT AND FILMING RATE SCHEDULE 

Port staff does not propose any changes to the FY 2009-10 Special Event and Filming 
Rate Schedule, which is listed on Exhibit E. 

RECOMMENDATION 

Port staff recommends the Port Commission approve the Fiscal Year 2009-10 Monthly 
Rental Rate Schedule, Monthly Parking Stall Rates (monthly parking stall schedule in staff 
report), and Special Event and Filming Rates, attached hereto as Exhibits C and E 
respectively. Port staff further recommends that the these Rate Schedules be effective as 
of August 1, 2009. Upon adoption of these Rate Schedules, Port staff will be authorized to 
enter into leases, licenses, and Memorandum of Understanding without specific Port 
Commission approval provided that the transaction conforms to all the approved leasing 
parameters. Port staff would not be authorized to enter into leases, licenses or MOUs at 
rental rates below those adopted without specific authorization from the Port Commission. 



Prepared by: Jeffrey A. Bauer, Senior Leasing Manager 

For: Susan Reynolds, Director of Real Estate 



-12- 



PORT COMMISSION 

CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 09-34 



WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



by Resolution No. 93-127, adopted September 8, 1993, and as 
amended by Resolution 93-135, the Port Commission authorized the 
Executive Director to approve and execute leases, licenses, and 
Memorandums of Understanding that conform to all of the leasing 
parameters set forth in Resolutions No. 93-127 and 93-135; and 

said leasing parameters provide that leases, licenses, and 
Memorandums of Understanding so approved and executed shall 
have rents that conform to the Monthly Rental Rate Schedule, Parking 
Stall Rate Schedule, and Special Event and Filming Rate Schedule as 
adopted and amended periodically by the Port Commission; and 

Port staff has reviewed current office/industrial-warehouse, parking, 
and special event and filming market data and has prepared and 
recommended an updated Fiscal Year 2009-10 Monthly Rental Rate 
Schedule, Monthly Parking Stall Rate Schedule (monthly parking stall 
rate schedule in staff report), and Special Event and Filming Rate 
Schedule; and 

Port staff recommends approval of the Fiscal Year 2009-10 Monthly 
Rental Rate Schedule, Parking Rate Schedule, and Special Events 
and Filming Rate Schedule which would set rental rates for 
office/industrial space, monthly parking stalls, and special event and 
filming rates as described in this staff report; and 

Port staff recommends approval of one month early entry for each year 
of lease term up to three months for the purpose of space 
preparation; and 

Port staff recommends approval of the updated Fiscal Year 2009-10 
Fisherman's Wharf Encroachment Permit Rates for Airspace Permits, 
Sidewalk Permits, and Curb-Space Permits as described in the staff 
report; and 

Port staff recommends approval of proposed fee wavier for certain 
special events including 4* of July Celebration, Fleet Week, City's New 
Year Eve Celebration, Madonna Del Lume, Miracle at Pier 48, and 
Project Homeless Connect; Port staff further recommends approval of 
fee reductions for the Small Boat Fishing Gear Swap Meet, and 
Delancey Street Christmas Tree Lot as described in the staff report, 
now therefore be it 



-13- 



RESOLVED, that the Port Commission hereby approves and adopts the Fiscal Year 

2009-10 Monthly Rental Rate Schedule, Parking Rate Schedule, 
Special Event and Filming Rate Schedule effective August 1 , 2009, 
approval of one month early entry for each year of lease term up to 
three months for the purpose of space preparation, approval of the 
updated Fiscal Year 2009-10 Fisherman's Wharf Encroachment 
Permit Rates for Airspace Permits, Sidewalk Permits, and Curb-Space 
Permits; and approval of proposed fee wavier and fee reductions for 
certain special as described in this Resolution; and be it further 

RESOLVED, that Port staff shall continue to provide the Port Commission, within 

thirty days following each calendar month, a summary of leases, 
licenses, and MOU's entered into and subleases or assignments 
consented to during that month. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at 
its meeting of July 14, 2009. 



Secretary 
•14- 






CBRE CONSULTING, INC. 

C8 RICHARD ELLIS 

4 Embarcadero Center, Suile 700 
San Francisco, CA 94111 

T 415 781 8900 
F 415 733 5530 

www.cbre.co m/con$uliing 

MEMORANDUM 

To: Jeff Bauer and Jonathan Stern; Port of San Francisco 

» 

From: Mary A. Smitheram-Sheldon and Courtney Posh; CBRE Consulting 

Dote: June 10,2009 

Subject: Fiscal Year 2009-10 Monthly Rental Rate Schedule, Monthly Parking Stall Rates, and 
Special Event and Filming Rotes Review 



As requested, CBRE Consulting ("CBRE") has reviewed the June 9, 2009 Memorandum prepared by 
Port of San Francisco staff, titled Fiscal Year 2009-10 Monthly Rental Rate Schedule, Monthly 
Parking Stall Rotes, and Special Event and Filming Rotes ("Memo"). CBRE focused its review on the 
proposed monthly rental rate schedule for the various types of land uses included, as well as the 
monthly parking stall rates. The special event and filming rates were not reviewed by CBRE. 

Given the nuances associated with each property leased by the Port of San Francisco, CBRE 
Consulting reviewed the rates for overall reasonableness based on the included referenced material 
OS well as additional reliable market data gathered by CBRE.' CBRE paid close attention to the 
changes over the prior years' rates, given the current state of the economy. In summary, CBRE 
concludes that the proposed rental rate schedule appears generally reasonable and consistent with 
overall market trends. 

Methodology and data sources 

Overall, the Memo utilized brokerage reports from reputable firms, recent Port lease data, and other 
surveys as the basis of its rent schedule. These data sources ore all believed to be sufficient for the 
broad categories of land uses considered. 

In Its Memo, Port staff utilized the annual and quarterly broker reports prepared by BT Commercial 
and Cornish & Carey as a benchmark for San Francisco office property performance. In the peer 
review process, CBRE also used the CB Richard Ellis MarketView Son Francisco Office Report for the 
first quarter 2009 as a data source. As reflected in the Memo and all three brokerage reports, the 
office market continued to soften through the first quarter 2009 with declining office occupancy 
rates, negative net absorption, and decreasing lease rates. 

The industrial/warehouse market review relied on the BT Commercial Warehouse Report for the first 
quarter 2009, in addition to data on recent lease contracts at Port properties. The BT Commercial 
Report was a key data source used in CBRE's Maritime Cargo and Warehouse Market Analysis 
prepared for the Port In January of 2009 and Is believed to be the best brokerage report for the 
industrial market. 



' It should be noted that Courtney Pash was on Intern at the Port of San Francisco in 2005 and 2006 
and thus has personal knowledge of a number of the specific properties leased by the Port. 



I 



CBRE CONSULTING, INC. 

Jeff Bauer ^^g RICHARD ELLIS 

Jonathan Sfern 
June 10,2009 
Pago 2 

In order to update the parking rates. Port staff conducted a parking survey of parking lots 
throughout San Francisco. The survey was conducted as of April 30, 2009 and thus is reflective of 
the current economic downturn. 

Conclusions 

In general, CBRE Consulting agrees with Port staff's recommendation for 2009-10 to maintain a 
majority of the minimum rent levels for office and industrial/warehouse space, reduce a few, and 
create new classifications for others. CBRE also supports the moderate increase in the average 
monthly rates for its parking facilities. The following paragraphs discuss CBRE's findings for the three 
major land use categories. 

Office 

The 2009-10 minimum monthly rental rates for most categories of Class B and C office space 
remained unchanged from the 2008-09 rates. The minimum rates for 490 Jefferson St., 501 Cesar 
Chavez, and the All Facilities Office Storage rate were the only categories in which the proposed rate 
is lower than the current rate. Citywide average asking rents have decreased over the post year 
across all three classes of office; however Class B and C average asking rents decreased less 
precipitously than Class A rents. 

Class B office space average asking rents throughout the City range from a low of $2,50 to a high 
of $3.25 per square foot per month (full service gross) according to the table included in the Memo 
and from $2.33 to $3.08 per square foot per month according to the CB Richard Ellis market report. 
The Class B proposed minimum rents for 2009-10 range from $2.45 to $2.75 per square foot per 
month, which are within the range of those indicated throughout the City and appear reasonable 
given the waterfront locations of the Port's Class B office space. 

The broker reports for Class C office space indicate rents ranging from $1.83 to $2.60 per square 
foot per month (full service gross). The minimum monthly rents for Class C office space 
recommended by Port staff for 2009-10 are between $1,00 and $2.50 per square foot per month. 
This range, coupled with the overall vacancy rate at the Port of 12 percent, which is slightly lower 
than the citywide rate, indicate that the proposed average asking rents are reasonable. 

While CBRE concludes that the proposed rates are reasonable given current market conditions, there 
is concern that the office market will continue to soften through the end of this year and possibly into 
2010. Thus, a more conservative recommendation could call for slightly reducing the low end of the 
range, particularly for those properties that may have a market disadvantage. 

Industrial and Warehouse 

Most of the industrial gross lease rates recommendations remained unchanged from 2008-09, with 
the exception of Piers 27/29/31, Piers 26-28, Pier 80, Pier 92 & SWL 344 & 349, which were 
reduced, and Pier 24 Annex, the only rate that increased. The warehouse market is considerably 
more stable than the office market. According to BT Commercial both vacancy rates and average 
asking rents in the San Francisco submarket remained stable from Ql 2008 to Ql 2009. These 
data, in addition to several recent leases signed by the Port, support the recommended minimum 
monthly rental rates for the industrial/warehouse properties. 






CBRE CONSULTING, INC. 

Jeff Bauer ^g RICHARD ELLIS 

Jonathan Stern 
June 10, 2009 
Page 3 

Parking 

With the exception of fishing industry tenants, Port staff has proposed an increase in the parking 
rates for the 2009-10 fiscal year. While this appears to be inconsistent with the general downturn in 
the economy, CBRE believes the minimal increases are reasonable given the recent closyre of the 
Pier '/? parking lot and the relative inelasticity of the San Francisco parking market. 

The contents of this memorandum are subject to the attached Assumptions and General Limiting 
Conditions. 



CBRE CONSULTING, INC. 

Jeff Bauer ^^ RICHARD ELLIS 

Jonathan Stern 
June 10,2009 
Page 4 

ASSUMPTIONS AND GENERAL LIMITING CONDITIONS 

CBRE Consulting, Inc. has made extensive efforts to confirnn the accuracy and timeliness of the 
information contained in this study. Such information was compiled from o variety of sources, 
including interviews with government officials, review of City and County documents, and other third 
parties deemed to be reliable. Although CBRE Consulting, Inc. believes all information in this study is 
correct, it does not warrant the accuracy of such information and assumes no responsibility for 
inaccuracies in the information by third parties. We have no responsibility to update this report for 
events and circumstances occurring after the date of this report. Further, no guarantee is made as to 
the possible effect on development of present or future federal, state or local legislation, including 
any regarding environmental or ecological matters. 

The accompanying projections and analyses are based on estimates and assumptions developed in 
connection with the study. In turn, these assumptions, and their relation to the projections, were 
developed using currently available economic data and other relevant information. It is the nature of 
forecasting, however, that some assumptions may not materialize, and unanticipated events and 
circumstances may occur. Therefore, actual results achieved during the projection period will likely 
vary from the projections, and some of the variations may be material to the conclusions of the 
analysis. 

Contractual obligations do not include access to or ownership transfer of any electronic data 
processing files, programs or models completed directly for or as by-products of this research effort, 
unless explicitly so agreed as part of the contract. 

This report may not be used for any purpose other than that for which it is prepared. Neither all nor 
any part of the contents of this study shall be disseminated to the public through publication 
advertising media, public relations, news media, sales media, or any other public means of 
communication without prior written consent and approval of CBRE Consulting, Inc. 



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EXHIBIT A 



2008-09 MININUM MONTHLY RENTAL RATE SCHEDULE^ 



TYPE OF USE & 
TYPE OF LEASE 

OFFICE SPACE USES: 



CLASS & LOCATION 
OF FACILITY/SPACE 



FULL SERVICE GROSS LEASES: CLASS B 

Roundhouse Plaza 

CLASS C 

Agriculture Building 
Window Office 
Interior Office 
401 Terry Francois 
696 Amador 



MINIMUM 
INITIAL LEASE 
RENTAL RATES 
Monthly Per Sq. Ft. 



$2.45 - 2.95 



$2.40 
$1.50 

$2.35 
$1.75 



2.60 
2.00 
2.60 
1.80 



MINIMUM 
NET EFFECTIVE 
RENTAL RATES 
Monthly Per Sq. Ft.* 



$2.20 - 2.75 



$2.20 
$0.98 
$2.00 
$1.50 



2.55 
1.48 
2.75 
1.60 



NET LEASES: 



OFFICE STORAGE 
INDUSTRIAL SHED USES; 

INDUSTRIAL GROSS LEASES: 



CLASS B 

Pier 9 Bulkhead Bldg. 
Pier 9 Pier Offices 
Pier 26 Annex Bldg. 
Pier 33-35 Bulkhead Bldg. 

CLASS C 

Piers 15-19 Bulkhead Bldgs. 

Pier 27 Admin. Bldg. 

Pier 29 Aimex Bldg. 

490 Jefferson St. 

Piers 26 Bulkhead Bldg. 

Pier 28 Bulkhead Bldg. 

Piers 50 Bulkhead Bldg. 

Pier 54 Office 

Pier 70, Building 1 1 

501 Cesar Chavez 

601 Cesar Chavez 

Pier 96 Admin. Bldg. 

Pier 96 Gate House Bldg. 

All Facilities 



$2.75 - 


3.00 


$2.40 ■ 


- 2.90 


$2.75 - 


3.00 


$2.40 ■ 


- 2.90 


$2.50 - 


2.90 


$2.40 ■ 


- 2.90 


$2.50 - 


2.75 


$2.25 ■ 


■ 2.50 


$1.85 - 


2.00 


$1.85 ■ 


- 1.75 


$1.35 - 


1.60 


$1.35 ■ 


■ 1.44 


$1.35 - 


1.60 


$1.35 ■ 


■ 1.44 


$1.85 - 


2.25 


$1.85 ■ 


■ 2.25 


$2.50 - 


2.75 


$2.00 ■ 


• 2.25 


$2.50 - 


2.75 


$1.25 ■ 


- 1.75 


$2.00 - 


2.30 


$1.95 ■ 


• 2.25 


$1.50 - 


1.75 


$1.25 - 


• 1.40 


$1.10 - 


1.25 


$1.00 ■ 


■ 1.20 


$1.80 - 


1.80 


$1.50 - 


■ 1.60 


$1.00 - 


1.25 


$0.90 - 


1.05 


$1.35 - 


1.60 


$1.25 - 


• 1.50 


$1.25 - 


1.50 


$0.75 - 


■ 1.25 



$1.10 - 1.10 



NORTHEAST WATERFRONT 
Pier 9 

Pier 17 -45 
Pier 27/29/31 



$1.10 - 1.10 



$1.25 


- 1.25 


$1.25 


- 1.25 


$0.75 


- 1.00 


$0.70 


- 0.75 


$0.75 


- 0.80 


$0.75 


- 0.80 



TYPE OF USE & 
TYPE OF LEASE 





MINIMUM 


MINIMUM 




INITIAL LEASE 


NET EFFECTIVE 


CLASS & LOCATION 


RENTAL RATES 


RENTAL RATES 


OF FACILITY/SPACE 


Monthly 


Per Sq. Ft. 


Monthly 


Per Sq. Ft.* 


SOUTH BEACH/CHINA BASIN 








Pier 24 Annex 


$0.45 - 


0.45 


$0.45 - 


0.45 


Piers 26-28 


$0.80 - 


1.00 


$0.80 - 


1.00 


Piers 48 


$0.85 - 


1.10 


$0.85 - 


0.85 


Pier 50-54 1/2 


$0.80 - 


1.10 


$0.80 - 


1.10 


SOUTHERN WATERFRONT 










SWLs 343 & 354 


$0.75 - 


0.85 


$0.80 - 


0.75 


Pier 80 


$0.75 - 


0.85 


$0.80 - 


0.75 


Pier 92 & SWLs 344 & 349 


$0.75 - 


0.85 


$0.80 - 


0.75 


Pier 96 M & R 


$0.75 - 


0.85 


$0.80 - 


0.75 



OPEN LAND AND 
PIER SPACE USES: 



INDUSTRIAL GROSS LEASES: 
"PORT STANDARD NET LEASE" 



UNPAVED LAND 





$0.26 ■ 


- 0.30 


$0.26 


- 0.30 


PAVED LAND 












$0.28 ■ 


- 0.32 


$0.28 


- 0.32 


IMPROVED LAND 


$0.30 ■ 


■ 0.34 


$0.30 


- 0.34 



FISHING INDUSTRY USES: 



INDUSTRIAL GROSS LEASES: 



FISH WHOLESALING & 
PROCESSING SPACE 



Improved Fish Processing Space 



LICENSES: 



Pier 45 Sheds 


$0.80 ■ 


■ 0.85 


$0.75 - 


• 0.80 


Second floor warehouse 


$0.40 


- 0.45 


$0.35 ■ 


- 0.40 


Pier 45 Office 


$1.10 . 


- 1.50 


$1.05 ■ 


- 1.25 


Sheds 










Pier 33 


$0.80 - 


■ 0.85 


$0.75 - 


■ 0.75 


699 Illinois 


$0.75 ■ 


• 0.80 


$0.70 - 


• 0.70 


Aprons 


$0.25 - 


■ 0.25 


$0.25 - 


■ 0.25 


FISHING GEAR STORAGE 


$0.22 - 


• 0.22 


$0.22 - 


0.22 



* The range in rental rates is provided as an example of the minimum rental rates for different space in the building (ie. higher 
rates for higher floors). It is not, and should not be construed as, a cap or maximum rental rate for such space. 

* Minimum Net Effective Rents are rents that reflect the application of rent credits for new paint and carpet. The 
Minimum Net Effective Rates reflect the amortization of rent credits provided by Port over the term of the lease. 

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Exhibit C 



2009-10 MININUM MONTHLY RENTAL RATE SCHEDULE^ 



TYPE OF USE & 
TYPE OF LEASE 

OFFICE SPACE USES; 



CLASS & LOCATION 
OF FACILITY/SPACE 



MINIMUM 
INITIAL LEASE 
RENTAL RATES 
Monthly Per Sq. Ft. 



MINIMUM 
NET EFFECTIVE 
RENTAL RATES 
Monthly Per Sq. Ft.* 



FULL SERVICE GROSS LEASES: CLASS B 



NET LEASES: 



I 



Roundhouse Plaza 


$2.45 


- 2.95 


$2.20 


- 2.75 


CLASS C 










Agriculture Building 










Window Office 


$2.40 


- 2.60 


$2.20 


- 2.55 


Interior Office 


$1.50 


- 2.00 


$0.98 


- 1.48 


401 Terry Francois 


$2.35 


- 2.60 


$2.00 


- 2.75 


696 Amador 


$1.75 


- 1.80 


$1.50 


- 1.60 


CLASS B 










Pier 9 Bulkhead Bldg. 


$2.75 


- 3.00 


$2.40 


- 2.90 


Pier 9 Pier Offices 


$2.75 


- 3.00 


$2.40 


•■ 2.90 


Pier 26 Annex Bldg. 


$2.50 


- 2.90 


$2.40 


- 2.90 


Pier 33 'A North 


$2.50 


- 3.00 


$2.25 


- 2.75 


Pier 35 Bulkhead Bldg. 


$2.50 


- 2.75 


$2.25 


- 2.50 


CLASS C 











OFFICE STORAGE 



Pier 9 Studio/office 

Piers 15-23 Bulkhead Bldgs. 

Pier 27 Admin. Bldg. 

Pier 29 Annex Bldg. 

Pier 33 I/2 

Pier 35 Interior office 

490 Jefferson St. 

Piers 26 Bulkhead Bldg. 

Pier 28 Bulkhead Bldg. 

Piers 50 Bulkhead Bldg. 

Pier 54 Office 

Pier 70, Building 1 1 

501 Cesar Chavez 

601 Cesar Chavez 

Pier 96 Admin. Bldg. 

Pier 96 Gate House Bldg. 

All Facilities 



$2.00 
$1.25 
$1.35 
$1.35 
$1.75 
$1.75 
$1.85 
$2.50 
$2.50 
$2.00 
$1.50 
$1.10 
$1.50 
$1.00 
$1.35 
$1.25 



2.50 
2.00 
1.60 
1.60 
2.25 
2.00 
2.25 
2.75 
2.75 
2.30 
1.75 
1.25 
1.80 
1.25 
1.60 
1.50 



$1.75 
$1.00 
$1.35 
$1.35 
$1.50 
$1.50 
$1.85 
$2.00 
$1.25 
$1.95 
$1.25 
$1.00 
$1.25 
$0.90 
$1.25 
$0.75 



2.25 

1.75 

1.44 

1.44 

2.00 

1.75 

2.25 

2.25 

1.75 

2.25 

1.40 

1.20 

1.60 

1.05 

1.50 

1.25 



$1.00 - 1.00 



$1.00 - 1.00 



lof3 

I:\Amy Q 2009\2009 Staff Reports\7- 14-2009 Staff ReportsMtem 7A Exhibit C 2009-10 Rate Schedule.doc 



I 



TYPE OF USE & 
TYPE OF LEASE 



Exhibit C 



CLASS & LOCATION 
OF FACILITY/SPACE 



MINIMUM 
INITIAL LEASE 
RENTAL RATES 
Monthly Per Sq. Ft. 



MINIMUM 
NET EFFECTIVE 
RENTAL RATES 
Monthly Per Sq. Ft.* 



INDUSTRIAL SHED USES; 

INDUSTRIAL GROSS LEASES: 



TYPE OF USE & 
TYPE OF LEASE 



NORTHEAST WATERFRONT 



Pier 9 


$1.25 


- 1.25 


$1.25 


- 1.25 


Pier 15 -17 


$0.75 


- 1.00 


$0.70 


- 0.75 


Pier 33 - 35 


$0.75 


- 0.85 


$0.70 


- 0.80 


Pier 19- 19 '/2 


$0.60 


- 0.75 


$0.75 


- 0.70 


Pier 23 


$0.75 


- 0.80 


$0.70 


- 0.75 


Pier 27/29/31 


$0.70 


- 0.80 


$0.70 


- 0.80 


Pier 47 shed storage 


$0.75 


- 1.00 


$0.70 


- 0.90 


SWL 302 storage 


$0.75 


- 1.00 


$0.65 


- 0.75 


SOUTH BEACH/CHINA BASIN 








Pier 24 Annex 


$1.18 


- 1.25 


$1.18 


- 1.25 


Piers 26-28 


$0.70 


- 1.00 


$0.65 


- 0.75 


Piers 48 


$0.85 


- 1.10 


$0.85 


- 0.85 


Pier 50-54 1/2 


$0.70 


- 1.00 


$0.65 


- 0.75 




MINIMUM 


MINIMUM 




INITIAL LEASE 


NET EFFECTIVE 


CLASS & LOCATION 


RENTAL RATES 


RENTAL RATES 


OF FACILITY/SPACE 


Monthly Per Sq. Ft. 


Monthly Per Sq. Ft.* 


SOUTHERN WATERFRONT 










SWLs 343 & 354 


$0.75 


- 0.85 


$0.80 


- 0.75 


SWL 345 


$0.75 


- 1.00 


$0.70 


- 0.80 


Facility 6019 


$0.55 


- 0.55 


$0.55 


- 0.55 


Pier 80 


$0.75 


- 0.85 


$0.80 


- 0.75 


Pier 92 & SWLs 344 & 349 


$0.75 


- 0.85 


$0.80 


- 0.75 


Pier 96 M & R 


$0.75 


- 0.85 


$0.80 


- 0.75 



OPEN LAND AND 
PIER SPACE USES: 

INDUSTRIAL GROSS LEASES: UNPAVED LAND 
"PORT STANDARD NET LEASE" 



PAVED LAND 



IMPROVED LAND 



$0.20 - 0.25 

$0.22 - 0.25 
$0.25 - 0.30 



$0.18 - 0.20 

$0.20 - 0.23 
$0.22 - 0.28 



2 of 3 

I:\Amy Q 2009\2009 Staff Reports\7- 14-2009 Staff ReportsMtem 7A Exhibit C 2009-10 Rate Schedule.doc 



I 



TYPE OF USE & 
T\TE OF LEASE 



Exhibit C 



CLASS & LOCATION 
OF FACILITY/SPACE 



MINIMUM 
INITIAL LEASE 
RENTAL RATES 
Monthly Per Sq. Ft. 



MINIMUM 
NET EFFECTIVE 
RENTAL RATES 
Monthly Per Sq. Ft.* 



FISHING INDUSTRY USES: 

INDUSTRIAL GROSS LEASES: 



FISH WHOLESALING & 
PROCESSING SPACE 

Improved Fish Processing Space 
Pier 45 Sheds $0.75 

Second floor warehouse $0.40 

Pier 45 Office 1st fl office $1.10 
Pier45 2"'*flmezz $0.85 



Sheds 



Pier 33 
699 Illinois 



$0.80 
$0.75 



LICENSES: 



Aprons $0.22 

FISHING GEAR STORAGE $0.22 



0.85 
0.45 
1.50 
1.25 



0.85 
0.80 

0.22 

0.22 



$0.75 


- 0.80 


$0.35 


- 0.40 


$1.05 


- 1.25 


$0.75 


- 1.00 


$0.75 


- 0.75 


$0.70 


- 0.70 


$0.22 


- 0.22 


$0.22 


- 0.22 



^ The range in rental rates is provided as an example of the minimum rental rates for different space in the building (ie. higher 
rates for higher floors). It is not, and should not be construed as, a cap or maximum rental rate for such space. 

* Minimum Net Effective Rents are rents that reflect the application of rent credits for new paint and carpet. The 
Minimum Net Effective Rates reflect the amortization of rent credits provided by Port over the term of the lease. 



3 of 3 

I:\Amy Q 2009\2009 Staff Reports\7-I4-2009 Staff ReportsMtem 7A Exhibit C 2009-10 Rate Schedule.doc 



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a. 



Exhibit E 



FY 2009-10 Special Events and Filming Fee Schedule 

Rate 



Still Photo Shoot 

Outdoor: 
Simple per day 
Major per day 

Indoor: 

Piers simple per day 

Piers major per day 

Pier 1 per day (Port offices - after hrs.) 

Pier 1 -Bayside 1-4 

Filming 

Simple per day 
Major per day 

Special Events 

Athletic events (walk/run/bicycle) per day 
Private event per day 
Public event per day 

Pier 30/32 - Entire Pier 

Private event: 
Event day 
Set-up per day 
Paid attendees: 
Event day 
Set-up per day 

Free admittance: 
Event day 
Set-up per day 



$ 1,000.00 
$ 2,000.00 



$ 1,000.00 
$ 2,000.00 
$ 2,000.00 
$ 2,000.00 



$ 1,000.00 
$ 2,000.00 



$ 1,000.00 
$ 2,000.00 
$ 2,000.00 



$12,500.00 
$ 2,500.00 

$15,000.00 
$ 2,500.00 



$10,000.00 
$ 2,500.00 



Partial Pier - Fee to be based on a pro-rata share of fee for entire pier. 



Pier 48 - Shed A & C 

Private: 

Per event day $15,000.00 

Set-up per day $ 2,500.00 

Paid attendees: 

Per event day $20,000.00 

Set-up per day $ 2,500.00 

Free admittance: 

Per event day $12,500.00 

Set-up per day $ 2,500.00 



Partial Pier - Fee to be based on a pro-rata share of fee for entire pier. 

A $10,000.00 premium will be added to the rate above for New Year's Eve events. 



Notes: 

Minor film and photo shoots are those that require very few to no support functions, i.e.; 
the photographer and the subject, minimal equipment, etc. 

Major film and photo shoots are those that require substantial support, i.e.; film crew, 
props, vehicles, generators, lighting, etc. 

At no time shall the fee charged for filming or a special event at a specific facility be less 
than the rental rate as specified under the Rental Rate Schedule for that premises. 




PORTs 



SAN FRANCISCO 

MEMORANDUM 

July 7, 2009 

To: MEMBERS, PORT COMMISSION 

Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Kimberly Brandon 
Hon. Michael Hardeman 
Hon. Ann Lazarus 

FROM: Monique Moyer AJ^^Ka^^^^ 

Executive Director 

SUBJECT: Request Authorization to Advertise a Request for Proposals (RFP) Soliciting 
Marine Structural and Civil Engineering Services for the Pier 43 Bay Trail 
Link 

DIRECTOR'S RECOMMENDATION: Approve Attached Resolution 

INTRODUCTION 

Port staff request the Port Commission's authorization to advertise a Request for 
Proposals (the "RFP") soliciting engineering design services for the Pier 43 Bay Trail Link 
(the "Project"). The proposed RFP will seek engineering consulting services to investigate, 
analyze, evaluate, and design the Project, assist in permitting, prepare bid documents, 
develop cost estimate and construction schedule, provide construction support, and 
perform other engineering work as required to complete the Project. The budget estimate 
for these services is $600,000. 

Port staff is committed on other projects and unable to complete the work in accordance 
with the project schedule. Local 21 and other City agencies have been contacted, but 
either lack the specialized marine engineering experience required or declined the work. 
The project cannot be contracted out under existing as-needed contracts because the level 
of effort is expected to cost more than the $200,000 threshold limit imposed by Section 
6.64 of the San Francisco Administrative Code as well as the $500,000 limit otherwise 
authorized by the Port Commission. It is anticipated that the proposed contract will have 
duration of approximately 27 months commencing October 2009 to December 201 1 . 



This Print Covers Calendar Item No. 7B 



)F SAN FRANCISCO 



^APORESS Pier 1 
FAX 415 2740528 web sf "^--^ ---^^ 



I 



BACKGROUND 

The proposed engineering consulting services will support the Project. The Project will 
create a public promenade and recreation area along the waterfront in San Francisco's 
historic Fisherman's Wharf. Located along the water side of little Embarcadero between 
Powell and Taylor Streets, the project will demolish a portion of Pier 43.5 (condemned), 
protect the shoreline, restore views and enhance the public experience along the 
waterfront from Pier 43 to the eastern edge of Pier 45 (See the Conceptual Site Plan 
below). 

Project features include: 

- Demolition of the majority of the condemned Pier 43.5, an asphalt covered timber 
pier most recently used as a parking area. 

- Repair of the remainder of Pier 43.5, including the historic bell tower access. 

- Replacement of the failing timber seawall from Pier 43 to the eastern edge of the 
' Franciscan Restaurant at Pier 43.5. 

- Construction of a 25-foot wide promenade from the western edge of Pier 43 to the 
eastern edge of the Franciscan Restaurant. The promenade includes a new 
marginal wharf structure with railing, sidewalk and curb. The marginal wharf is 
approximately 20 feet wide by 480 feet long, consisting of a concrete deck 
supported on concrete piles. 

- Minor site improvements between the western edge of the Franciscan Restaurant 
and the eastern edge of Pier 45. 

- Street lighting and miscellaneous site improvements. 

This Project is a component of a larger concept plan originally developed between 2002 
and 2004 by a joint BCDC/Port Fisherman's Wharf Planning Committee. The committee 
sponsored 16 public meetings and published the recommendations in the Fisherman's 
Wharf Planning Committee Recommendations, July 2004. The concept is consistent with 
current policy guidance including the BCDC San Francisco Waterfront Special Area Plan 
and The Port of San Francisco Waterfront Land Use Plan. In early 2008, the Project was 
included in a General Obligation Bond passed by San Francisco Voters. During the first 
half of 2009, staff worked with consulting engineers to complete conceptual engineering 
and construction cost estimates. The pieces are now in place to move ahead with final 
engineering. 

The total Project budget including engineering and construction is $8,000,000 and funded 
entirely by a General Obligation Bond, Proposition A - Clean and Safe Neighborhood 
Parks Bond, which was passed by San Francisco Voters on February 5, 2008. The 
Project is one of numerous projects included in the $185 million bond. 




a. m 



-3- 



SELECTION PROCESS 

Port staff proposes to procure the engineering design services for the Project through a fair 
and competitive process. Port staff will convene a selection panel to evaluate proposals 
and score the most qualified firm meeting the RFP criteria. The panel will consist of at 
least two Port staff members and two non-Port representatives. The process will be 
facilitated and monitored by the Port's Contract Manager as well as its Human Rights 
Commission (HRC) Contract Compliance Officer. HRC has established a 21% 
subconsulting goal for Local Business Enterprises. 

The final evaluation and recommendation shall be based upon a combination of the 
proposal and interview scores which will each carry a 50% weight in the evaluation 
process. 

TENTATIVE SCHEDULE 

On July 6, 2009, Port staff received Civil Service Commission approval to procure these 
services through a consulting contract. 

Activity Target Date 

Port Commission Authorization to Advertise Tuesday, July 14, 2009 

Commence RFP Advertisement* Friday, July 17, 2009 

Pre-proposal Meeting Tuesday, July 28, 2009 

Proposal Due Date Monday, August 17, 2009 

Interviews Tuesday, September 1, 2009 
Port Commission Authorization to Award Contract Tuesday, October 13, 2009 

*The RFP will be advertised using the following resources: 

- Human Rights Commission Directory of Certified Local Business Enterprises 

- City and County of San Francisco Office of Contract Administration website 

- Port of San Francisco website 

- Newspapers (SF Examiner, SF Chronicle ) 

- Various MinorityA/Vomen Business and Professional Associations 

FUNDING 

The proposed consulting services are estimated to cost approximately $600,000 and will 
be funded by the General Obligation Bond approved by San Francisco voters in February 
2008 as described earlier. 

SUMMARY 

Port staff is ready to seek competitive proposals for professional engineering services as 
described in this report. Therefore, staff request that the Port Commission approve the 
attached resolution authorizing staff to advertise for competitive proposals soliciting final 
engineering services for the Pier 43 Bay Trail Link. 

Prepared by: Steven Reel, Project Manager 

Norma Nelson, Contract Manager 

For: Ed Byrne, Chief Harbor Engineer 

Tina Olson, Finance Deputy Director 



I 



I 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 09-35 

WHEREAS, the proposed Pier 43 Bay Trail Link (tlie "Project") is located in San 

Francisco's Fisherman's Wharf area, north of Embarcadero between Powell 
and Taylor Streets, and will enhance the public experience along the 
waterfront; and 

WHEREAS, the Project will demolish a portion of Pier 43^2, replace approximately 500 

lineal feet of seawall, and create a 25-foot wide public promenade including a 
new marginal wharf structure; and 

WHEREAS, the San Francisco voters passed a General Obligation Bond on February 5, 
2008 for an amount of $8,000,000 to fund this Project; and 

WHEREAS, to implement the Project, Port staff require marine structural and civil 

engineering consulting services to investigate, analyze, evaluate and design 
the Project, assist in permitting, prepare bid documents, develop cost 
estimates and construction schedules, provide construction support, and 
perform other engineering work as required to complete the Project, and 

WHEREAS, Port staff obtained approval from the Civil Service Commission on July 6, 
2009, for personal services contract #4003-09/10, to contract with a private 
engineering firm for these consulting service; and 

WHEREAS, the Port Commission has allocated funding from the General Obligation 
Bond to pay for the proposed consulting services which are estimated to 
cost $600,000; and 

WHEREAS, Port staff have drafted a Request For Proposals ("RFP") to solicit consulting 
services for engineering required for the Project; and 

WHEREAS, Port staff has incorporated a 21% subconsulting goal for Local Business 
Enterprises in the proposed RFP as recommended by the Human Rights 
Commission (HRC); now, therefore, be it 

RESOLVED, that the San Francisco Port Commission hereby authorizes Port staff to 

advertise a Request For Proposals to solicit engineering consulting services 
for the Pier 43 Bay Trail Link and to initiate a competitive selection process 
for contract award at a future Port Commission meeting. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission 
at its meeting of July 14, 2009. 



Secretary 



-5- 




PORT. 



OF 
SAN FRANCISCO 



TO: 



MEMORANDUM 

July 7, 2009 

MEMBERS, PORT COMMISSION 
Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Kimberly Brandon 
Hon. Michael Hardeman 
Hon. Ann Lazarus 



FROM: 



Monique Moyer M \JL9^ 
Executive Director ^ ^ 



Ck/ 



SUBJECT: Request authorization to advertise for competitive bids for Contract No. 
2735 Security Lighting at Pier 80 

DIRECTOR'S RECOMMENDATION: Approve Attached Resolution 

Overview 

Port staff request Port Commission's authorization to advertise for competitive bids for 
Contract No. 2735 Security Lighting at Pier 80. The project scope includes installing 
wall lighting along the aprons of Sheds A and D and installing new high mast area 
lighting West of Sheds A and D and refurbishing 7 existing high mast lights. 

Background 

Pier 80 terminal has been subject to numerous break-ins over the past several years. 
Thieves have been entering the facility and taking what ever they can and have caused 
many electrical/mechanical equipment breakdowns. Poorly lighted areas are 
contributing to security risks. All of the light fixtures along Sheds A and D are inefficient, 
lack adequate controls and have passed their expected life. 

Proiect Description 

The Department of Public Works ("DPW") Bureau of Engineering has completed design 
drawings and specifications for the security lighting at Pier 80. Pursuant to the design 
scope, this project will replace the existing light fixtures along the aprons of Sheds A 
and D with new energy efficient 175W metal halide HID (High Intensity Discharge) light 
fixtures, install high mast (80' high) luminaires with (5) 1,000W metal halide HID lamps 

This Print Covers Calendar Item No. 7C 



F SAN FRANCISCO 



DDRESS Pier 



FAX 415 274 0528 



Page 2 



in the west side open areas of Sheds A and D and refurbish the 7 existing high mast 
lights with new light fixtures. The new lighting layout will provide 5 foot candle lighting 
level meeting IEEE (Institute of Electrical and Electronics Engineers) requirements. 
New lighting control will manage lighting at two levels - security level and working level. 
To maintain security lighting, 30% of light fixtures will be turned on automatically at dusk 
and turned off at dawn. During Pier 80 operations, the lighting level will be controlled by 
manual switches to meet individual work requirements. This will create most efficient 
use of lighting without waste. 

Bids will be advertised to reach contractors through the following methods: 

• Human Rights Commission list of contractors 

• Human Resources Outreach list of contractors 

• Port Internet 

• City and County of San Francisco purchasing internet 

• Plan Rooms (Builders Exchange, Contractors Information Network, etc.) 18 total 

• Newspapers (SF Examiner, SF Chronicle and Small Business Exchange) 

In the solicitation of bids for this project. Port staff will follow San Francisco Human 
Rights Commission (HRC) bidding procedures and requirements. The Human Rights 
Commission has reviewed the project scope and recommended a 13.5% subcontracting 
goal for Local Business Enterprises (LBE) in the solicitation of bids. 

Funding 

The total estimated construction cost for this project is $1 ,220,000 which includes a 
10% contingency. 



Title 


Amount 


Engineer's Estimate 


$1,110,000 


10% Project Contingency 


$110,000 


Total 


$1,220,000 



The project estimated cost, and contingency is fully funded by Proposition IB Grant 
Funds. The Port Commission authorized the Executive Director or her designee by staff 
Resolution No. 08-06 to apply for, accept and expend $3,660,000 in Proposition 1B 
Grant Funds from the California Office of Homeland Security for security improvements 
at the Port of San Francisco. 



Pages 



Schedule 

The project construction is scheduled to start in October, 2009 and the anticipated 
completion date is March, 2010. 

The following is the anticipated project schedule: 

Commission Approval to Advertise July 14, 2009 

Advertise for Bid July 1 7, 2009 

Bids Due July 31, 2009 

Award of Contract September, 2009 

Notice to Proceed October, 2009 

Final Completion March, 2010 

Summary 

Port staff is prepared to seek competitive bids for this project. Therefore, Port staff 
request Port Commission authorization to advertise for competitive bids for Contract No. 
2735 Security Lighting at Pier 80. 



Prepared by: Mabal S. Bhat 

Senior Electrical Engineer 

James J. Lee 
Electrical engineer 

For: Edward F. Byrne 

Chief Harbor Engineer 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 09-36 



WHEREAS, 
WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



RESOLVED, 



Port staff seek authorization to obtain competitive bids for Contract No. 
2735, Security Lighting at Pier 80; and 

The construction contract will provide for installation of new 1 75W 
metal halide HID light fixtures along the waterside of Pier 80 Sheds A 
and D and 80 feet high mast light fixtures in West side open area of 
Shed A; and 

The Department of Public Works ("DPW") Bureau Of Engineering has 
completed design drawings and specifications for the security lighting 
at Pier 80; and 

The current engineering construction cost estimate for this project is 
$1,110,000, with a 10% contingency of $110,000 for a total of 
$1,220,000; and 

The project cost and 10% contingency is fully funded by Proposition IB 
Grant Funds from the California Office of Homeland Security for 
security improvements at the Port of San Francisco; and 

In the solicitation of bids for this project. Port staff will incorporate the 
20% subcontracting goal for Local Business Enterprises (LBEs) as 
recommended by the Human Rights Commission (HRC); now, 
therefore be it 

That the San Francisco Port Commission hereby authorizes Port staff 
to advertise for and accept competitive bids for Contract No. 2735 
Security Lighting at Pier 80. 



/ hereby certify that the foregoing resolution was adopted by the San Francisco 
Port Commission at its meeting of July 14, 2009. 



Secretary 




PORTo^ 



SAN FRANCISCO 

MEMORANDUM 

July 9, 2009 

TO: MEMBERS, PORT COMMISSION 

Hon. Rodney Fong, President 
Hon. Stephanie Sliakofsky, Vice President 
Hon. Kimberly Brandon 
Hon. Michael Hardeman 
Hon. Ann Lazarus 

FROM: Monique Moyer kyj} ^j^ 

Executive Director U 

SUBJECT: Request to Award Master Contract to URS/AGS Joint Venture for As- 
Needed Engineering and Related Professional Services in an amount not 
to exceed $1.5 million 

DIRECTOR'S RECOMMENDATION: Approve Attached Resolution 

INTRODUCTION 

The Port Commission, at its meeting on March 10, 2009, adopted Resolution No. 09-16, 
authorizing staff to issue a Request for Qualifications (RFQ) for As-Needed Engineering 
and Related Professional Services. The Request for Qualifications (RFQ) solicited 
responses from qualified firms to enter into three master agreements (contracts) for as- 
needed professional services over a three-year period at an amount not to exceed $1.5 
million each. Under the terms of the proposed contract, there is no guarantee that the 
Port will authorize work for the entire "not-to-exceed" contract amount. Services 
procured by these contracts are subject to funding availability, staffing availability and 
competitive proposals. 

At the May 26, 2009 Port Commission meeting, the Commission authorized the 
Executive Director to enter into contracts with two of the three highest-ranked firms who 
responded to the Request for Proposal (RFP) solicitation process. This proposed 
contract with URS/AGS Joint Venture is the last contract resulting from the recent RFP 
process for recommended contract award. 

As stated in the May 26, 2009 Port Commission staff report on this matter, URS/AGS 
Joint Venture was ranked number one from the RFP process. However, the 
negotiations could not be successfully concluded in order to meet the May 26, 2009 
meeting. 

This Print Covers Calendar Item No. 7D 



F SAN FRANCISCO 



FAX 415 274 0528 



The proposed contractor, URS/AGS is a joint venture tiiat includes a partner whicii is a 
minority owned, local business enterprise certified by the San Francisco Human Rights 
Commission. In addition, the firm has committed to subcontracting 20% of the contract 
work to Local Business Enterprises (LBEs). 

This staff report provides the background, scope of work, selection process, funding and 
resolution summary. 

BACKGROUND 

Staff secured the requisite Civil Service Commission approval at its March 2, 2009 
regularly scheduled meeting with the support of IFPTE Local 21 . The Request for 
Qualifications was advertised on March 13, 2009. Port staff will continue to budget and 
utilize City staff from other departments through Interdepartmental Work Orders in 
instances where requisite city staff are available to perform work prior to soliciting 
outside consultants to perform work under these contracts. 

Section 6.64 of the San Francisco Administrative Code allows the department head to 
execute public work and construction-related professional service contracts on an as- 
needed basis which shall be assigned as contract service orders. However, such 
contract service orders can only be issued for three years after the date of award (for 
the Master Agreements). No contract service order or multiple contract service orders 
for any single public work, whether in one phase or multiple phases, shall cumulatively 
exceed $200,000, including all modifications. A department head may issue or modify 
any contract service order(s) to exceed the foregoing limits only upon the department 
head's written determination establishing the urgency of the work and the justification 
for proceeding under Section 6.64 rather than by formal competitive process. 

The Administrative Code provides authority directly to the Department Head to issue 
CSOs in excess of $200,000 upon a determination of urgency and justification, without 
additional approval from the Commission. However, it has been the Port's practice to 
obtain Commission approval for CSOs for any single public work that exceed $200,000. 
There are times when due to unforeseen conditions or to preserve funding such as 
grants or to meet bond obligations, schedules are best not interrupted for the time that it 
takes to secure official Port Commission approval to exceed the $200,000 limit as 
specified in the San Francisco Administrative Code. Examples where CSOs have 
exceeded $200,000 for a single project include the Pier 52 Boat Launch, Illinois Street 
Bridge and Pier 45 Drainage projects. As such, in the proposed resolution, staff seeks 
Commission approval to alter prior practice by allowing the Executive Director (as 
department head) to authorize contract service orders for any single project in the 
amount of $500,000 without further Port Commission approval, provided that the project 
meets the requirements of Section 6.64 of the San Francisco Administrative Code to 
establish urgency and justification for doing so. Increasing the as-needed service value 
requiring Port Commission approval is beneficial in many ways: it alleviates the burden 
on the Port Commission calendar, saves staff time used developing and presenting 
Commission resolutions and expedites project delivery while still meeting all 
requirements of the City's Administrative Code. 

Page 2 of 1 1 



Assignment/Scope of Work: 

As indicated in the resolution authorizing advertisement of the RFQ, due to the nature of 
as-needed services, it is not feasible to define a specific scope of work in advance. 
Instead, the RFQ provided descriptions of CSOs issued under the existing as-needed 
contracts and a list of the types of professional disciplines and worl< likely to be needed. 
The specific scopes of work will vary with differing project needs. The type of project 
activities and facility work anticipated under this contract includes (but is not limited to) 
dredging, bridges, harbors, piling (marine and land based), seawalls/wharfs, general 
utilities, security enhancements, renovation design work, etc. In addition to design 
related work, consultants may also be requested to provide services related to 
engineering cost estimates, specification preparation, peer reviews and second 
opinions. Port Project Managers/Coordinators within the Engineering, Real Estate, 
Planning & Development and Maritime divisions will prepare a description of work 
required (Specific Statement of Work) and estimated budget before informal Requests 
for Proposals (RFP) are issued to the approved pre-qualified list of teams. 

The informal RFP will require submittal of a fee proposal from one or all of the as- 
needed consulting firms. Project staff will be responsible for assuring that the proposed 
fees reflect a reasonable level of effort in terms of labor resources and any 
reimbursables, if applicable. Billing rates for various anticipated classifications for the 
multi-disciplinary team have been negotiated on a fixed basis for the duration of the 
three-year contract. The Port's Contract Manager will oversee contract administration 
and assist in facilitating periodic audits of CSOs and invoices. 

After negotiating a reasonable fee, staff will issue a Contract Service Order (CSO) to the 
selected firm whose proposal represents the best value and qualifications for the 
specific project. After the CSO has been certified as to funds, a notice to proceed will 
be issued to commence work under the Port Project Manager/Engineer/Coordinator's 
oversight. 

All as-needed Master Agreements include the following language with regards to 
change orders or modifications to Contract Service Orders: 

Fee increases and time extensions may be considered only if change orders require a 
major design or specification change based upon the following change order conditions 
and subject to the Port's written approval by way of a written CSO amendment: 

• Owner initiated major changes in scope (this does not include technological or best 
practice changes that should be incorporated into the design by the design team to 
produce a more cost effective, efficiently constructed and esthetically desirable 
design within the construction budget); or 

• Unforeseen Conditions; or 

• New regulatory, legal or administrative requirements subsequently imposed (after 
the project is bid; resulting in design changes that the consultant reasonably would 
not have known about.) The consultant is responsible for assuring that its design 
and specifications meet all known legal, regulatory and administrative requirements 

Page 3 of 1 1 



at bid time or otherwise reasonably could have been known to become applicable to 
the project at a future date. 

This contract language is used by the Port's Project Manager/Engineer to manage CSO 
and project budgets for consultant CSO's. 

Selection Process: 

The Port advertised the RFQ on March 13, 2009 with a Local Business Enterprise (LBE) 
goal of 20% as determined by the Port's HRC Contract Compliance Officer. A pre- 
submittal meeting was held on March 25, 2009. Some 45 firms were represented at the 
pre-submittal meeting. 

The following six (6) consultant teams responded to the RFQ and were deemed 
responsive (identified in alphabetical order): 

1. Creegan + D'Angelo/FE Jordan JV 

2. Holmes Culley/Tennabaum JV 

3. KPFF Consulting Engineers 

4. Moffatt & Nichol 

5. URS/AGS Joint Venture 

6. Winzler and Kelley/Structural Design Engineers Joint Venture 

A four-member selection committee composed of two Port staff members and staff 
members from the San Francisco Public Utilities Commission reviewed submittals. The 
paper screening (written submittal) and interview phases of the selection process were 
evaluated using the following criteria: 1) Technical Approach; 2) Relevant Team 
Experience; 3) Staff Qualifications and 4) Team Organization. The written submittal 
phase represented 60% of the total score and the interview represented 40% of the total 
score. The heavier weight on the written phase is due to the need to hire teams with 
sufficient writing ability in managing the Port's projects. 

To expedite the selection process within the advertised schedule, all six (6) teams were 
invited for interview. Staff convened interviews on April 24, 2009 during which 
consultant teams responded to a series of questions and made a presentation of their 
qualifications. A summary of the raw scores for both phases of the evaluation process, 
as well as the raw combined total scores is attached as Exhibit 1 . These scores do not 
include the additional points that are added due to firms joint venturing with Local 
Business Enterprises (LBEs). Since KPFF Consulting Engineers did not joint venture 
with an LBE as a prime consultant, that firm did not receive the benefit of additional 
points that each of the three top ranked teams received. The final scores with HRC 
bonus rating points are reflected in the San Francisco Human Rights Commission 
Memorandum included as Exhibit 2 to this staff report. In addition, the HRC has 
provided a list of the recommended firms' LBE Subconsultant participation that includes 
the areas of expertise as well as LBE percentage participation. 



Page 4 of 1 1 



The top three ranked firms are as follows: 

1. URS/AGS Joint Venture 

2. Winzler & Kelly/Structural Engineering Design Joint Venture 

3. Creegan & D'Angelo/FE Jordan Joint Venture 

Although the URS/AGS Joint Venture team scored as the top ranked team, staff had not 
been successful in negotiating reasonable billing rates for this proposed three year 
commitment to award a contract to URS/AGS Joint Venture as of the May 26, 2009 Port 
Commission meeting. As such, in accordance with the requirements of the RFQ, 
URS/AGS Joint Venture had until May 25, 2009 to reconsider their billing rates. The 
Port and the URS/AGS Joint Venture have now agreed to acceptable billing rates for 
this contract. Accordingly, Port staff recommends contract award to URS/AGS Joint 
Venture as the number one ranked firm as a result of the solicitation process. 

FUNDING 

Although the proposed master contract has a not-to-exceed dollar amount of 
$1 ,500,000 over three years, each Contract Service Order issued will be based upon 
available funding as appropriated for the required work and the maximum dollar 
threshold limits authorized by the Port Commission. It is anticipated that CSOs will be 
funded through both operating and capital budgets. 

SUMMARY 

Port staff recommends that the Port Commission adopt the attached proposed 
resolution which provides: 

1 . Authorization to enter into a Master Agreement (contract) with URS/AGS Joint 
Venture for As-Needed Engineering and Related Professional Services, with a term 
of three years and the option to extend the contract term for one additional year; 

2. Authorization to award the recommended contract in an amount not to exceed 
$1,500,000; and 

3. Approval of the Executive Director to issue Contract Service Orders (CSOs) without 
further Port Commission approval in amounts that shall not exceed $500,000 
singularly or cumulatively for any single public works project. 



Prepared by: Norma Nelson, Contract 

Manager/Contract Administrator 

For: Tina Olson, Deputy Director 

Finance & Administration 
Ed Byrne, Chief Harbor Engineer 



Page 5 of 1 1 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 09-37 



WHEREAS, On March 10, 2009, through Resolution 09-16 the Port Commission 

authorized Port staff to issue a Request for Qualifications (RFQ) for As- 
Needed Engineering and Related Professional Services; and 

WHEREAS, periodically. Port projects require essential architectural and engineering 
services which exceed the staff resources available within the Port and 
other City departments; and 

WHEREAS, Port staff have previously managed architectural and engineering 

consulting needs through "as-needed" contracts to augment staffing of 
important projects; and 

WHEREAS, following staff's issuance of the RFQ dated March 13, 2009, the Port's 

evaluation committee ranked firms based upon raw written submittal and 
interview scores; and 

WHEREAS, the San Francisco Human Rights Commission is authorized to add points 
to raw scores as incentives for prime consultant to joint venture with Local 
Business Enterprises, which resulted in URS/AGS Joint Venture as one of 
the highest-ranked firms; and 

WHEREAS, Port staff have successfully negotiated acceptable terms and conditions 
for a master contract with URS/AGS Joint Venture for as-needed 
engineering and related professional services; and 

WHEREAS, Port staff wish to enter into a master contract with URS/AGS Joint Venture 
for as-needed engineering and related professional services to provide 
timely and cost-effective professional services on Port projects; now, 
therefore, be it 

RESOLVED, that the San Francisco Port Commission hereby authorizes staff to award 
and enter into a master contract with URS/AGS Joint Venture in such form 
as approved by the City Attorney's Office; and, be it further 

RESOLVED, that the Port Commission hereby authorizes staff to execute such master 
contract in an amount not to exceed $1 ,500,000, for a term of three (3) 
years, with the Port reserving the option to extend the contract term for 
one additional year beyond the initial term; and, be it further 



Page 6 of 1 1 



RESOLVED, that the Port Commission hereby approves the Executive Director's 
issuance of Contract Service Orders (CSOs) under such Master 
Contracts pursuant to Section 6.64 of the Administrative Code provided 
that such CSOs under each master contract shall not cumulatively exceed 
$500,000 without further Port Commission authorization. 



/ hereby certify that the foregoing resolution was adopted by the Port 
Commission at its meeting of July 14, 2009. 



Secretary 



Page 7 of 1 1 



Exhibit 1 



RFQ: As-Needed Engineering and Related Professional Services 
SUMMARY OF WEIGHTED RAW SCORES ( No HRC Incentive Points) 



WRITTEN SCORES (Weighted @60%) 


Firm Name 




Score 


Rank 


KPFF Consulting Engineers 




53.4 


1 


URS/AGS JV 




53.4 


1 


Winzler & Kelley/Structural Design Engineers JV 




51.3 


2 


Creegan & D'Angelo/FE Jordan JV 




48.9 


3 


Moffatt & Nichol Engineers 




47.1 


4 


Holmes Culley/Tennabaum JV 




43.8 


5 




INTERVIEW SCORES (Weighted at 40%) 


Firm Name 




Score 


Rank 


KPFF Consulting Engineers 




33.2 


3 


URS/AGS JV 




36.5 


1 


Winzler & Kelley/Structural Design Engineers JV 




34.9 


2 


Creegan & D'Angelo/FE Jordan JV 




32.2 


4 


Moffatt & Nichol Engineers 




30.4 


6 


Holmes Culley/Tennabaum JV 




31.9 


5 




COMBINED SCORES (Written & Intervievt^) 


Firm Name 


Score 


Rank 


URS/AGS JV 


89.9 


1 


KPFF Consulting Engineers 


86.6 


2 


Winzler & Kelley/Structural Design Engineers JV 


86.2 


3 


Creegan & D'Angelo/FE Jordan JV 


81.1 


4 


Holmes Culley/Tennabaum JV 




77.5 


5 


Moffatt & Nichol Engineers? 




75.7 


6 



Please see the San Francisco Human Rights Commission Memorandum attached as 
Exhibit 2 for final scores with HRC Incentive Points 



Page 8 of 1 1 



Exhibit 2 
MEMORANDUM 



DATE: 
TO: 

FRANCISCO 



FROM: 
SUBJECT: 



APRIL 30, 2009 

TINA OLSON, DEPUTY DIRECTOR, ADMINISTRATION & FINANCE, PORT OF 

SAN FRANCISCO 

NORMA NELSON, CONTRACT ADMINISTRATOR, PORT OF SAN 

WINNIE LEE. PROJECT ENGINEER 

TIM LEUNG, ADMINISTRATIVE ENGINEER 

ED BYRNE, CHIEF HARBOR ENGINEER 

SELORMEY DZIKUNU, CONTRACT COMPLIANCE OFFICER, HRC 

AS NEEDED ENGINEERING & RELATED PROFESSIONAL SERVICES 
CONTRACT AWARD ELIGIBILITY 



The HRC has reviewed the written proposal and interview score sheets for the above 
referenced RFQ. The written responses to the RFQ were the basis for the selection of all six 
firnns for oral interviews. The proposal review score was 60% of the total score and the oral 
interviews accounted for 40% of the final score. 



1 Below is a 


table summarizing the final rankings. 
















WRITTEN PROPOSALS 


ORAL INTERVIEWS 


FINAL SCORE 


FIRM 


SCORE 


RATING 
BONUS 


ADJ 
SCORE 


RAN 
K 


SCORE 


RATINGS 
BONUS 


ADJ. 
SCOR 

E 


RANK 


Score 


RANK 


URS/AGS JV 


213.6 


16.02 


229.62 


1^' 


145.2 


10.89 


156.0 
9 


1 


385.71 


1 


WINZLER & 
KELLY/SDE JV 


205.2 


15.39 


220.59 


2ND 


139.6 


10.47 


150.0 

7 


2 


370.66 


2 


CREEGAN +FE 
JORDAN J V 


195.6 


14.67 


210.27 


4IH 


128.8 


9.66 


138.4 
6 


3 


348.73 


3 


KPFF 

CONSULTING 

ENGS. 


213.6 





213.6 


3KU 


132.8 





132.8 


5 


346.4 


4 


HOLMESCULLEY/ 
TENNEBAUM 


175.2 


13.14 


188.34 


glH 


127.6 


9.57 


137.1 
7 


4 


325.51 


5 


MOFFATT & 

NICHOL 

ENGINEERS 


188.4 





188.4 


5'" 


121.6 





121.6 


6 


308.0 


6 



All RFQ responses were responsive to HRC's 20% LBE subconsulting goal. 

URS/ AGS JV, Winzler & Kelly/SDE JV, and Creegan + D'Angelo/FE Jordan JV are eligible for 

a 7.5% ratings bonus. 

URS/ AGS JV, Winzler & Kelly/SDE JV, and Creegan + D'Angelo/FE Jordan JV are the three 
highest ranked firms. The HRC understands the Port will negotiate with the three highest ranked 
firms for contract award. 



Page 9 of 1 1 



URS/ AGS JV, Winzler & Kelly/SDE JV, and Creegan + D'Angelo/FE Jordan JV have met all 
Chapter 14B pre-award requirements. The HRC hereby declares the URS/AGS JV, the Winzler 
& Kelly/SDE JV and the Creegan + D'Angelo/FE Jordan JV eligible for contract award. 

A separate HRC Memo will list all the LBE firms and percentage of LBE participation 
commitments for each of the above listed teams. 

The HRC understands that the LBE participation goal may not be met on all Contract Service 
Orders. However, to ensure that consistent good faith efforts are made to meet the goal, and to 
monitor compliance, each Contract Service Order will include a section listing the proposed LBE 
participation and provide an explanation if it is below the project goals. A copy of each Contract 
Service Order will be sent to the HRC. 

Please notify me when contract negotiations are concluded. In the meantime, if you 
have questions, or if I can be of any further assistance, please do not hesitate to contact me at 
274-0511. 



Page 10 of 11 



As -Needed Engineering and Related Professional Services: 
LBE SUBCONSULTANT PARTICIPATION 



LBE Subconconsultants 


Service 


Participation 


Ajmani & Pamidi, Inc. 


Fire Protection 


2% 


Barceion & Jang 


LEED Cert & Standards/Green BIdg/ADA 
Design 


1% 


Carey & Co 


Historic Preservation Arch./ADA Design 


2% 


FW Associates 


Building Electrical Engineering 


2% 


HRA Consulting Engineers 


Building Electrical Engineering 


1% 


M. Lee Corporation 


Cost Estimating 


1% 


Meridian Surveying Engrs. Inc. 


Topographic and Bathymetric Survey 


1% 


MHC Engineers, Inc. 


Mechanical Engineering 


2% 


North Tower Environmental, Inc. 


Environmental Hazwaste 


1% 


Pacific Eng. & Consult. Inc. 


Field Investigation/Const. Support 


1% 


Structus, Inc. 


Structural and Marine Engineering 


2% 


Telamon Eng. Consult Inc. 


Civil Engineering 


2% 


UndenA/ater Resources 


Underwater Inspection/Dredging Inspection 


2% 


TOTAL 




20% 



Page 11 of 1 1 





-pORTof^ 

SAN FRANCISCO 

MEMORANDUM 

July 9, 2009 

TO: MEMBERS, PORT COMMISSION 

Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Kimberly Brandon 
Hon. Ann Lazarus 
Hon. Michael Hardeman 

FROM: Monique Moyer 

Executive Director 

SUBJECT: Annual Contracting Activity Report - Fiscal Year 2008/09; 
4^^ Quarter Period April 1 , 2009 through June 30, 2009 

DIRECTOR'S RECOMMENDATION: informational Item - No Action Required 

INTRODUCTION 

The purpose of this report is to provide regular reporting of the Port's contracting 
activities as legally required by the City and County of San Francisco through its 
Administrative Code or based upon policies and practices adopted by the San 
Francisco Port Commission. Background information on these requirements is provided 
at the end of this report as Exhibit 1 . 

This report includes a summary of: 1)4^^ Quarter Period for Fiscal Year 2008-09 
contracting activities and Local 21 staffing changes; 2) annual statistical data, 3) as- 
needed contracting three year data; and 4) projected upcoming contracting activities. 

SUMMARY 

Based upon Port historical procurement volume, the 2008/09 Fiscal Year has been a 
very busy year for contracting. Formally procured contracts awarded this fiscal year 
include the following: 

• Brannan Street Wharf Project Engineering Design 

• Youth Employment Program - Environmental Maintenance of Port Infrastructure 

• Financial Advisory Services 

• Pier 70 Brownsfield Environmental 

This Print Covers Calendar Item No. 7E 



OF SAN FRANCISCO 



V 

m 



FAX 415 274 0528 



• Elevator/Escalator Maintenance 

• As-Needed Engineering Services 

• Coastal Engineering Services for Mission Bay Bayfront Parl< Shoreline Protection 

In addition to the above, the Port has embarked upon other projects of significance to 
the Port using the as-needed contracts. These projects include: 

Pier 43.5 Detailed Condition Survey and Conceptual Plan 

Pier 45 Drainage Improvements 

Access Control System Programming 

CCTV System Programming 

Pier 35 Fire Alarm Upgrades 

Pier 1 Server Emergency Power Lighting Upgrade 

Army Corp of Engineers and Regional Water Quality Control Board permitting 

support consulting services for the Brannan Street Wharf Project 

Maritime Cargo and Land Use Study 

Pier 50 Valley Substructure Repair Project 

Consulting Services to assist with SWL 351 Development Evaluation 

Pier 35 Superstructure Shed Structural Evaluation 

Piers 68 & 70 Utility Mapping/BAE Electrical Separation 

Considering all of the above contracting activities, the Port achieved local business 
enterprise subcontracting participation of 26.89%; exceeding its goal of 20%. 

I. 4*'' Quarter, FY 2008/09 Contracting/Local 21 Activities: 

New As-Needed Engineering & Related Services Contracts Awarded - 4^^ Quarter 



Blanket IVIaster Agreements for 
Engineering & Related Services 


Amount 
Awarded 


LBE 
Amount 


LBE % 


As-Needed Professional Services - 
TOTAL 

• Creegan & D'Angelo/FE Jordan 
JV 

• Winzler & Kelly/SDE Engineers 


$3,000,000 
$1,500,000 
$1,500,000 


$600,000 
$300,000 
$300,000 


20% 
20% 
20% 



The Port of San Francisco has met the 20% Disadvantaged/Local Business Enterprise 
(D/LBE) participation goal for as-needed contracts with the participation level at 69.07% 
for this quarter. Most of this D/LBE participation represented environmental 
professional services. One single Contract Service Order (CSO) was issued to 
URS/Avila Joint Venture for Brannan Street Wharf CEQA and Permitting Support. This 
CSO alone included 87% LBE participation out of a total of five (5) CSOs issued during 
this reporting period. 

This decline in CSO (five CSO transactions) usage is due primarily to the fact that no 
new CSOs under the Port's as-needed contracts could be issued after April 10, 2009 
pursuant to the San Francisco Administrative Code requirements. The first two quarters 



Page 2 of 12 



of the fiscal year resulted in 1 1 CSO transactions and the average for the prior year was 
17 per quarter. Additional details are provided in Exhibit 2 to this report. 

Local 21 Staffing Activitv for Fiscal Year 2008/09 4th Quarter. 4/1/09 - 6/30/09 



Class/Title 


Activities 


1053 IS Business 
Analyst-Senior 


(Vacancy due to release of PCS employee) - a new 
PCS appointment made eff. 6/24/09 from the 
Registry. 


1 652 Sr. Accountant 


(Vacancy due to retirement) - Bacl<fill of the position 
on hold pending budget review. 


5382 Design Trainee III 


(As needed position in Engineering Division) - 
temporary exempt appointment made eff. 6/15/09. 


9395 Property Manager 


(Vacancy due to retirement) - PCS appointment 
made eff. 6/1/09 from eligible list. 



II. Annual Report Contracting Activity 

The following tables summarize the Port's Annual Contracting Activitv for FY 08/09. 



Type of Contract 


Amount 
Awarded 


LBE 
Amount 


LBE % 


As-Needed Professional Services 
(Master Contracts - Total of 33 CSOs 
issued) 


$1,530,844 


$ 437,884 


28.6% 


General Services (Contracts Only) 


$ 99,600 


$ 99,600 


100% 


Professional Services 


$2,194,982 


$ 503,114 


22.92% 


Construction Services 


$ 185,000 


$ 37,850 


20.46% 


Totals 


$4,010,426 


$1,078,448 


26.89% 



Contracting Activities that were exempt from D/LBE participation for FY 08/09 



TYPE OF LBE EXEMPT CONTRACT 


Contract 
Amount 


D/USBE 
Amount 


D/L/SBE * 

% 


Administrative Code 


$ 81,284 








Federal Contracts 


$1,422,702 


$453,790 


31.8% 


Sole Source Contracts 


$3,809,754** 


$ 4,725 


.12% 


HRC Waiver 


$ 800,000 








Totals 


$6,113,740 


$458,515 


7.5% 



*SBE = federal small business enterprise participation requirements. 

**lncludes Board of Supervisor's authorization to award contract for shoreside power. 



III. 



Three year summary of as-needed contracting activities: 



Overall, the Port has been quite successful in meeting its goal for Disadvantaged/Local 
Business Enterprise (D/LBE) participation on its contracts. Six (6) or 50% of its as- 
needed contracts include Disadvantaged Business Enterprise (DBE) Joint Ventures. 
These joint venture contracts provide for participation of local disadvantaged 

Page 3 of 12 



businesses as prime consultants for growing small businesses as well as subconsulting 
opportunities for those business seeking growth opportunities. 

The Port's overall D/LBE subcontracting participation has exceeded the 20% goal with a 
participation rate of 23.68%. (See Exhibit 4: Three Year Summary Report) The 
participation of D/LBE firms on Environmental As-Needed Contracts as been particularly 
successful at a rate of 34.05%. In spite of the challenges in securing D/LBE firms to 
perform marine engineering type work, the Port has met the 20% goal for engineering 
related as-needed contracts at 20.55% for the three year contract period. 

All consultants met the 20% goal except as follows: 

As-needed Consultant LBE Participation 

Tom Eliot Fisch/Winzler & Kelly Joint Venture 1 7.60% 

BDI/ECS Joint Venture (Suspended)* 1 .6% 

MCC2 Joint Venture (Suspended)* 0.0% 

AGS/LEE Inc. (Not Activated) 0.0% 

Bay Area Economics 6.73% 

*Suspended due to lack of available work 

Port staff intends to work with those firms that continue under contract to improve their 
participation of local businesses. 

$200.000 As-Needed Contracting Authorization 

During fourth (4*^) quarter of FY 2008/09, the Port Commission was not asked to 
approve any projects in which the use of as-needed contract services exceeded the 
approved $200,000 threshold. 

To date there have been a total of three (3) Contract Service Orders that have 
exceeded the $200,000 threshold for Port Commission approval. These projects are 
as follows: 

1 . Pier 70 Master Plan Project increase from $200,000 to $500,000; and 

2. Pier 45 Drainage Improvement Project increase from $200,000 to $250,586. 

3. Pier 52 Boat Launch Project at $230,000. 

IV. Projected Contracting Activities for the Upcoming Year: 

Anticipated Construction Services Contracts to be Bid through Engineering 

• Pier 80 Lighting (Est. $1 .4 million) 

• 401 Terry Francois ADA Accessibility Upgrades (Est. $500,000) 

• Pier 45 Drainage Improvements (Est. $2 million) 

• Pier 9 Fire Protection (Est. $60,000) 

• SFPUC Efficient Lighting (Est. $650,000) 

• FW-Joint Security Operations Center (Est. $6.9 million) 

Page 4 of 12 



• Pier 50 Valley Substructure (Est. $8 million) 

• Pier 33 North Bulkhead Improvements (Est. $840,000) 

• Pier 94/96 Backlands-Ground Subsidence, Storm Drainage and Seawall Repair 
/Pier 94/96 Backlands Improvements (Est. $8 million) 

• Amador Street Swales (Est. $425,000) 

• Hyde Street Fuel Dock Substructure Repair (Est. $1 .5 million) 

Construction-related Professional Services 



Description of Work 


Estimated 

Dollar 

Amount 


Project 


As-Needed Environmental & Related 
Services (RFP) (3 contracts at $1,000,000 
each) 


$3,000,000 


Port-wide As-Needed 
Services 


Design for repair of existing substructure of 
bridge leading to Sinbad Restaurant and 
Agriculture building east apron repair 


$50,000 


Sinbad Bridge & Ag Big 
Walkway Repair 


Roof Truss End Connections Engineering 


$12,000 


Pier 35 


Railroad Tunnel Modification 


$200,000 


Pier 80 


Pier 43.5 Engineering Design (RFP) 


$600,000 


Bond funded Project 


Design Development for automated bilge 
treatment system 


$15,000 


SWL 303; Hyde Street 


Dredging Inspections 


$50,000 


Piers 


CCTV Specification Development 


$50,000 


Homeland Security 


Blanket CSO for Project Scoping Services 


$75,000 


Engineering Support 


Investigate and design cost estimate for 
repairs 


$5,000 


Pier 80 Shed A Walls 


Design Services for Aprons 19, 26, 28 and 
33 (separate projects) 


$400,000 


Portwide Apron Repair 


Seismic Upgrade and Fender Installation 


$50,000 


Hyde Street Fuel Dock 
Substructure Repair 


TOTAL ESTIMATED AMOUNT 


$4,507,000 





Real Estate and Related Consulting Services 
RECOMMENDATION 



(None Anticipated) 



The attached report is submitted to meet the requirements stated in the report 
Background. In closing, staff requests the Port Commission's acceptance of this report. 



Prepared by: 
For: 



Norma Nelson, Contract Administrator 

Tina Olson, Director of Finance & Administration 



cc: Clerk, Board of Supervisors 

Local 21, IFPTE Representative Ging Louie 
Department of Public Works, Peg Divine 
Human Rights Commission, Selormey Dzikunu 

Page 5 of 12 



Exhibits: 

1. Report Background 

2. FY 2008/09 4*^ Quarter As-Needed Contracting Activity Report 

3. FY 2008/09 Annual Contracting Report including 4*^ quarter results 

4. Three Year Summary of DBE Participation (As-Needed Contracts) 



Page 6 of 12 



EXHIBIT 1 

BACKGROUND 

I 

The purpose of this report is to comply with legal and policy mandates for the City and 

County of San Francisco and Port Commission. These legal and policy requirements 
are primarily based upon the following: 

1 . "As-Needed" contracting requirements as promulgated by Section 6.64 of the 
San Francisco Administrative Code, Port Commission Resolution 03-50 and a 
Letter of Agreement with Local 21 International Federation of Professional and 
Technical Employees Association (IFPTE). (Effective April 2005, a $200,000 
limit was imposed via City ordinance for use of as-needed contract services per 
each single public works project; not including general planning or non- 
construction related professional services such as real estate economics as- 
needed contracts.) 

2. Local 21 Union for the IFPTE and the City and County of San Francisco Department of 
Public Works requested that the Port include the following additional information in the 
subject quarterly reports, as it applies to the use of as-needed professional service 
contracts: 

• Contracting activity for the current reporting period 

• Anticipated contracting activity for the upcoming quarter 

• Estimated staffing numbers and projects related to the as-needed 
contract services. 

3. San Francisco Administrative Code Section 14(b) requires all departments and 
contract awarding authorities to report to the Mayor on their progress in the 
preceding fiscal year toward the achievement of the LBE goals and their steps to 
ensure non-discrimination against MBEs (Minority Business Enterprises), WBEs 
(Women Business Enterprises) and OBEs (Local businesses other than MBE or 
WBE). 

The Port of San Francisco has been assigned by the San Francisco Human 
Rights Commission (HRC) an overall Disadvantaged Business Enterprise (DBE) 
or Local Business Enterprise (LBE) subcontracting participation goal of 20%. 
This means that 20% of all of contracted work procured by the Port of San 
Francisco must be awarded to Local Business Enterprises or the contractor must 
have demonstrated a good faith effort to do so. 

In the award of leases, franchises, concessions, and other contracts not subject 
to the discount provisions of Administrative Code Section 14(b), contract 
awarding authorities such as the Port shall utilize the good faith efforts steps to 
maximize opportunities to for LBE participation, as deemed practicable to do so. 
At the minimum, contract awarding authorities should notify LBEs that are 
certified to perform the work contemplated in a contract and solicit their interest in 
the contract. These good faith effort steps are described in each solicitation for a 

Page 7 of 12 



Port lease, franchise, concession and other contracts such as development 
agreements. 

Definitions 

1 . As-needed Professional Service Contracts include professional service contracts 
procured on a request for qualifications basis to establish a pool of Master 
Agreements in which work is contracted under task orders or Contract Service 
Orders (CSOs), as needed to complete work required on an immediate basis that 
can not otherwise be performed by existing City and County of San Francisco 
staff. The Port has twelve as-needed contracts that have a total authorized 
contracting capacity of $8,150,000. 

2. Professional Service Contracts procured through a formal contracting process 
-contracts valued greater than $29,000 

3. Professional Sen/ice Contracts procured through an informal contracting process 

- contracts valued at less than $29,000 

4. Construction Service Contracts 

-public works/construction contract means a contract for the erection, 
construction, renovation, alteration, improvement, demolition, excavation, 
installation, or repair of any public building, structure, infrastructure, bridge, road, 
street, park, dam, tunnel, utility or similar public facility that is performed by or for 
the City 

4. Information Technology Contracts 

- acquisition of computer hardware, software, peripherals and appropriate 
network, consulting, maintenance, training and support services, as well as any 
successor contracts 

5. General Services Contracts 

- an agreement for those services that are not professional services. Examples 
of "general services" include: janitorial, security guard, pest control, parking lot 
attendants and landscaping services 

Other Contracting Activitv 

In addition to the above contracting activity, the Port has been engaged in number of 

leasing evaluations, renewals, and new leases. The Real Estate Division reports that all 

leases are conducted on a first come, first serve basis. There is no tracking by 

ethnicity, gender nor location of corporate headquarters for the tenants granted leases 

on Port property. However, the majority of the lease transactions are with local small 

businesses. 

The Maritime Division contract for shoreside power equipment at Piers 27 and 29 has 
been approved by the Board of Supervisors as a sole source contract to a firm based in 
Seattle, Washington as selected by the primary end user, Princess Cruise Lines, Ltd. 
Princess Cruise Lines, Ltd is a co-applicant with the Port for the project funding. In 
addition. Port staff presented a report to the Port Commission at its May 13, 2008 
meeting "regarding options for a Request for Proposals for Concrete and/or Asphalt 
Batching Plant at Seawall Lot 352 with a Bulk Maritime Terminal at Pier 94". At its May 
27, 2008 meeting, the Port Commission authorized staff to issue a RFP (not yet issued) 
extending the opportunity for the lease and operation of a Concrete and/or Asphalt 
Batching Plant at Seawall Lot 352 with a Bull< Maritime Terminal at Pier 94. 

Page 8 of 12 



Development contracting transactions are highly specialized and market driven by the 
private investment entities pursuing such projects on Port property. However, the Port 
still adheres to the Port's policy of encouraging participation of ail local small businesses 
on its development projects without regards to race or gender. The Port has been 
engaged in two development projects that include the Piers 27-31 Mixed Use 
Recreation project and the Seawall Lot 337 project. It is anticipated that a Seawall Lot 
351 RFP will be issued during the first quarter of FY 08/09. In all instances, the Port 
includes the following statement: 

'V. OTHER PROJECT REQUIREMENTS 
A. Equal Opportunity 
The Port Commission encourages the participation of disadvantaged local business 
enterprises in this RFP opportunity. The selected Respondent will be encouraged to 
consult with the City's Human Rights Commission to determine appropriate methods 
for promoting participation by disadvantaged business enterprises in this opportunity. 
The City's list of certified Local Business Enterprises may be accessed through the 
following URL: (httD://sfpov.orp/site/uploadedfiles/sfhumanriahts/directon//vlist 1.htm) . " 

Steps to Assure Non-Discrimination against MBEs. WBEs and OBEs 

To assure that MBEs, WBEs and OBEs are not discriminated against in Port contracting 
opportunities, the Port has implemented the following standard procedures: 

• Request information from the San Francisco Human Rights Commission as to 
the availability of MBEs, WBEs and OBEs certified as offering services required 
on Port projects. Such information includes availability statistics in percentages 
for MBEs, WBEs and OBEs. In addition, the Port has requested the MS Excel 
database of such certified firms to assure inclusion as project opportunities 
become available. 

• Availability statistics in percentages are included in advertising for all formally 
procured contracts. 

Outreach through Minority, Women and Local media 
Direct mailing, faxing and e-mailing of procurement opportunity notices 
Identifying set-aside opportunities exclusively for Micro-LBE firms 
Working with Port staff to eliminate barriers to MBEs, WBEs and OBEs gaining 
access to Port contracting opportunities. Such barriers include qualifications 
based upon prior knowledge/experience on the project or past work with existing 
consultants. 

Hold prime consultants accountable for actions that impede the success of MBE, 
WBE and OBE firm's success on contracts such as the withholding of essential 
information required to perform subcontracted work by notifying the San 
Francisco Human Rights Commission to perform investigations, when deemed 
appropriate. 



Page 9 of 12 



FY 2008/09 4th QUARTER AS-NEEDED CONTRACTING ACTIVITY REPORT 




AS-NEEDED CONTRACTS 


cso# 


CSO Description 


CSO Amt 


DBE Amt 


DBE % 


Architectural & Engineering 


- 


No Activity 
No Activity 






- 


Creegan + D'Angelo 

Tom Eliot Fisch/Winzler& Kelly JV 

Subtotal - A& E Services 


Environmental 












Treadwell & Rollo/Hydroconsult JV 

Subtotal Treadwell & Rollo 
Weiss Associates 

Subtotal Weiss Associates 
URS Corp/Avlla & Associates JV 

Subtotal Weiss Associates 
Subtotal Environmental 


TH-04 

1 
WA-07 
WA-07 

2 
URS-07 

1 

4 


Site Assessment of Pier 90 

UST Soil /Groundwater Investigations 
UST Boring Repair (CSO Mod) 

CEQA & Permitting Brannan Street 


$ 29,167 
$ 29,167 
23,672 
5,388 
$ 29,060 
$ 171,309 
$ 171,309 
$ 229,536 


$ 24,808 
$ 24,808 
1,113 
2,900 
$ 1,113 
$ 148,894 
$ 148,894 
$ 174,815 


85.06% 
85.06% 

4.70% 
53.82% 

3.83% 
86.92% 
86.92% 
76.16% 


Construction Support Services 












BDI/ECS JV 

Maritime Construction Coalition JV 

Subtotal • OS Services 

TOTAL CONSTRUCTION-RELATED 





No Activity 
No Activity 








Real Estate Economics & Related 












Bay Area Economics 

CBRE Consulting, Inc. 

Economic & Planning Systems, Inc. 

Keyser Marston Associates 

Subtotal - Real Estate Economics 


CBRE-03 
1 


No Activity 

Maritime Cargo & Industrial Land Use 

Study Update 

No Activity 

No Activity 


$ 23,573 


$ 


0.00% 


TOTAL AS-NEEDED CSOs 


5 




$ 253,109 


$ 174,815 69.07%! 



[NEW AS-NEEDED CONTRACTS 


$1,500,000 each 


FY 2008/09 4th Qtr 




CSO Amt 1 LBEAmt | LBE% 


Engineering & Related Services 


Total As-Needed Eng Services 




Creegan + O'Angelo/Fe Jordan JV 
Winzler&Keliy/SDEJV 


^75,000. 00 


$15,000.00 


20.00% 


$0.00 


$0.00 


0.00% 


$75,000.00 


$15,000.00 


20.00% 



Exhibit 2 



Page 10 of 12 




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I 



PORT° 



OF 

SAN FRANCISCO 

MEMORANDUM 

July 9, 2009 

TO: MEMBERS, PORT COMMISSION 

Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Kimberly Brandon 
Hon. Michael Hardeman 
Hon. Ann Lazarus 

FROM: Monique Moyer ylA A^tJ^Oy 

Executive Director ^ 

SUBJECT: Informational presentation on the July 2009 Draft Preferred Master Plan 
for Pier 70. 

DIRECTOR'S RECOMMENDATION: Informational Only - No Action Required 

Overview 

In 2007, the Port of San Francisco commenced a public planning process to develop a 
Preferred Master Plan for Pier 70. The Plan area covers 65 acres along San 
Francisco's Central Waterfront just south of Mission Bay, bounded generally by 
Mariposa Street to the north, Illinois Street to the west, 22"^* Street to the south and San 
Francisco Bay, to the east. As described below, the purpose of the Plan is to chart a 
course to recognize and preserve Pier 70's extraordinary collection of historic resources 
and invite new economic development of this brownfields site, including a generous 
waterfront open space network, in a manner compatible with the Port's ongoing 
maritime ship repair operations at Pier 70. 

The planning process has been extensive, involving over 60 public workshops and 
community presentations to incorporate insights and comments from the City's diverse 
stakeholders. The Port required the assistance of consultant studies to address the 
complexities of adaptive reuse and infill development at Pier 70. Furthermore, the Port 
has benefitted from a collaborative process with sister City agencies, as well as key 
state and federal agencies with jurisdiction over development within Pier 70. 

Port staff has made presentations to the Port Commission previously to seek public 
input and Commission direction on preliminary drafts of the Plan.^ In addition, Port 

This Print Covers Calendar Item No. 8A 



^ Previous Port Commission presentations: June 12, 2007 - December 16, 2007 - January 11, 2008 
April 22, 2008 - August 12, 2008 

^F SAN FRANCISCO 

tmmmmmmmm 



FAX 415 274 0528 



Commissioners Brandon and Shakofsky have each participated in the community 
workshops and have provided continued insight and guidance throughout the planning 
process. Port staff is now pleased to report that it has produced the Draft Pier 70 
Preferred Master Plan (Plan) in complete form, incorporating information from all the 
consultant analyses, as well as revisions in response to public comments received. 

The Port seeks to complete this phase of the planning process, to receive Port 
Commission and public comments this summer, in the hopes that this Plan reflects 
strong public consensus about Pier 70's future. Ultimately, the Port will require a 
private development partner to realize the goals and objectives set for Pier 70. 
However, prior to taking that step, it is important for the Port Commission together with 
the public, to have a clear blueprint, which is reflected in this Plan. The Port will hold a 
public workshop on the Plan on July 29, 2009. On August 1 1 , 2009, Port staff will return 
to the Port Commission to collect its comments and direction on the Plan. Additionally, 
Port staff invites public comment through August 28, 2009. Thereafter, Port staff will 
report back on any Plan refinements, and seek direction from the Port Commission on 
next steps. 

Plan Vision and Goals 

The Plan is based on a Vision and set of Goals, which largely were defined from the 
start of the public planning process: 

Vision: Create a vital and inviting mix of uses at Pier 70 that integrates historic 
rehabilitation, activates public open spaces, creates a new jobs center that generates 
revenues critical to realize public benefits, and supports a continuing ship repair 
industry . 

The Goals establish the foundation to achieve the Vision: 

1. Preserve the long-term viability of the 150-year old maritime ship repair industry; 

2. Create a Pier 70 National Register Historic District and rehabilitate its 
extraordinary historic resources; 

3. Provide sites for office, research, emerging technologies, light industry, 
commercial and recreational uses to expand San Francisco's economic base, 
and use the resulting tax and rent revenues to fund public benefits; 

4. Develop a thriving new district that recalls Pier 70s historic activity; 
accommodates ship repair operations, and invites new visitors to work, learn and 
play along the City's southeastern waterfront; 

5. Create major new shoreline open space that extends the San Francisco Bay 
Trail and Blue Greenway to and through Pier 70; 

6. Remediate environmental contamination of Pier 70 to enable public use and 
enjoyment of the public waterfront; 



7. Produce a development site plan that is walkable and inviting, and fosters use of 
alternative, green transportation modes and practices; and 

8. Nurture a sustainable neighborhood consistent with San Francisco's 
environmental policies, v/ith special attention to carbon footprint impacts of 
new development and climate adaptation strategies that consider this 
waterfront location. 

The Plan Goals define many public needs. They reflect diverse perspectives expressed 
over the course of the Pier 70 public planning process. Any successful outcome will 
require a sensitive balance, and viable economic development opportunities that invite 
the private sector to work with the City to realize Pier 70's Vision. No one Goal can 
prevail over the rest; the Plan relies on an integrated approach where the public and 
policy-makers understands and accepts each element, to bring the Vision to reality. 

The Plan calls for a program for the 65-acres site which: 

• Continues operation of the ship repair yard on 15 acres; 

• Establishes a Pier 70 National Historic District and adaptive reuse of 
approximately 700,000 square feet of historic buildings; 

• Creates approximately 1 1 acres of new waterfront open space and an additional 
9 acres of internal open space; 

• Provides for approximately 3,000,000 square feet of new infill development 
compatible with the historic district; and 

• Integrates environmental remediation and infrastructure to support the Plan's 
mix of land uses. 

Plan Purpose 

In addition to establishing the Vision and Goals, the Plan describes the opportunities 
and requirements for development to revitalize Pier 70. With strong public 
agreement and support, this Plan will enable the Port and City to move forward 
with efforts to invest major public and private capital resources at Pier 70. 

The Plan was crafted not only to meet the needs within Pier 70, but was developed in 
the broader context of fitting in with the rest of the City, optimizing investments in public 
transportation, maximizing shoreline public access, and upholding public trust principles 
as part of new development and change. The Port has developed valuable 
partnerships with policy and regulatory agencies, including the San Francisco Planning 
Department, Municipal Transportation Agency, California State Lands Commission, The 
Regional Water Quality Control Board and the San Francisco Bay Conservation and 
Development Commission. The Port believes it is important to convey to the 
development sector and the public at large that the planning and land use program for 
Pier 70 plays an important strategic role in the economic future of San Francisco. 



Plan Organization 

The Plan is organized into five chapters, which are summarized below. 

Chapter 1: Site History 

The most significant influence on the Plan and what makes Pier 70 unique is its 150+ 
year history and the impact it has had on the development of the United States, its 
significant contribution to the war efforts and the architectural and labor history that 
shaped Pier 70. This rich history, reflected in many of the architectural structures at Pier 
70, is the basis for the Plan goal to permanently memorialize the site's importance in a 
Pier 70 National Register Historic District. 

Chapter 2: Ship Repair 

Ship repair is what establishes Pier 70's identity. This chapter explains how this 
maritime industry functions, and its importance in the City's economy. As a key public 
trust use that is engrained as part of the Port's maritime mission, the long-term 
continuation of the ship repair industry is a requirement of the Plan. Any new land uses 
and development that take place under the Plan must make accommodations to allow 
the requirements of this industry. The Plan recognizes that, just as it has in the past, 
ship repair operations will continually evolve and respond to economic and 
technological changes. This is accepted as an act of historic preservation, because 
keeping this maritime industry at Pier 70 is what maintains the authenticity of this site, 
and the Central Waterfront at large. 

Chapter 3: Context for Change 

This chapter provides an overview and context for recent land use policies and plans 
adjacent to or near Pier 70, including San Francisco's Eastern Neighborhoods Plan, the 
Mission Bay Redevelopment Plan, the City's Economic Development Strategy and the 
Eastern Neighborhoods transportation program (EN TRIPS) led by the Municipal 
Transportation Agency. The City's new policies and capital investments that have 
emerged in the last 10 years establish a sound setting for the revitalization of Pier 70. In 
addition, this chapter provides an overview of previous Pier 70 planning efforts and the 
market assessment and potential appropriate uses for Pier 70, which also highlights 
Pier 70's extraordinary opportunities. 

Chapter 4: Bringing Together the Past, the Present and the Future 

This chapter presents the elements of the Plan. For each of the Plan Goals presented 
above. Chapter 4 presents objectives that provide further definition and direction, so 
that new development and improvements are sensitive to their setting and responsive 
to the balancing of many competing public needs. These objectives are presented 
below. Recognizing the delicacy of inviting new development within a Pier 70 National 
Register Historic District, the Plan includes a tailored preservation strategy and detailed 
design criteria focused on infill development, to lay ground rules that will foster positive 
new changes at Pier 70. 



-4- 



Historic Preservation Objectives 

1. Create and maintain a Pier 70 National Register Historic District, and allow new 
development within the District consistent with Secretary of the Interior 
Standards for Historic Rehabilitation. 

2. Recognize continuation of viable ship repair and drydock operations as an act of 
preserving Pier JO's history, and give priority to ship yard changes that may be 
necessary to support the industry while maintaining the overall integrity of the 
historic district. 

3. Protect the integrity of the Pier 70 Historic District by directing major new 
construction to open and vacant areas, or locations containing non-contributing 
resources. 

4. Apply the Pier 70 Infill Development Design Criteria to ensure new construction 
meets Plan objectives and complies with Secretary of the Interior Standards for 
Historic Rehabilitation. 

Land Use Objectives 

1. Support and maintain the ship repair industry within the Pier 70 shipyard, and 
ensure new development and land uses are designed and operated to respect 
ship repair operational needs. Recognize that the continuation of ship repair 
industry operations is consistent with the historic preservation objectives of this 
Plan and the Port's public trust mission. 

2. Invite a wide range of activities that promote public use and appreciation of the 
waterfront and adaptive reuse through rehabilitation of Pier 70's historic 
resources. 



3. Promote a mix of uses oriented toward commercial, office, educational, retail, 
cultural ar 
to Pier 70 



cultural and entertainment uses along 20^^ Street, to provide an active entrance 



4. Target publicly-oriented uses for the Union Iron Works Machine Shop as an 
anchor facility with uses that activate the 20^^ Street corridor to attract broad 
public appreciation of this Very Significant historic resource. 

5. Allow office, biotech, research and development, light industrial and institutional 
uses in new construction and rehabilitated historic resources at Pier 70. 

6. Consistent with the open space policies of this Plan, utilize imaginative design of 
new development to maximize the interface and enjoyment of shoreline parks 
and public spaces created at Pier 70. 



-5- 



7. Allow residential development opportunities on parcels along Illinois Street, if 
conflicts with ship repair operations and other adjacent uses can be minimized. 

Building Form and Intensity Objectives 

1. Retain strong visual and pedestrian linkages to future waterfront parks and 
public spaces within Pier 70. 

2. Convey the distinctive form of the Non-Contributing slipways. 

3. Respect traces of on-site railroad movement as part of the public space network. 

4. Recognize the historic connection between the Building 12 complex and the 
slipways on the Bay. 

5. Allow flexibility for building heights to accommodate new construction in Blocks 
6-8, located away from Pier 70's historic core, to support the density of economic 
development allowed in this Plan. 

Character and Quality of Development Objectives 

1. Recognize and respect Pier 70 as a historic industrial landscape that documents 
the evolution of the ship building processes and as a modern shipyard that will 
evolve to support future ship repair operations. 

2. New development must respect the unique industrial heritage of the area. 

3. Showcase the spatial relationships of Pier 70's historic buildings and features 
and the waterfront, which reflect the general layout and design of the historic 
shipyard, by creating links between the existing ship repair operation, remnants 
of the past such as rail corridors and slipways, and new development and 
adaptive reuse. 

4. Allow for architectural diversity that is compatible with the character of the Pier 
70 historic district. 

5. Incorporate designs that strengthen the connections between the Pier 70 historic 
district and adjacent Dogpatch and Potrero Hill neighborhoods. 

6. Maintain significant view corridors to the Bay and city. 

Open Space Objectives 

1. Create public open spaces that create a sense of identity and focus for new 
development at Pier 70, attracts a diverse spectrum of users and is sensitive to 
the ship repair operations. 



-6- 



2. Develop a diverse network and program of parks, paths, roads and public 
spaces tliat connect upland areas to the waterfront; provide recreational 
amenities for the community; and celebrate and reveal the rich history of Pier 70. 

3. Integrate the Bay Trail and Blue Greenway into the design of the Pier 70 open 
space network, which creates an inter-connected path that links public open 
spaces along the shoreline. 

4. Use hardscape paving and materials to improve streets, pedestrian ways, and 
other public spaces that interface with historic resources to respect the historic 
industrial character of Pier 70 and create shoreline access wherever possible. 

5. Limit new street trees and plantings within historic building cluster areas to 
respect the historic industrial character of Pier 70. 

6. Create and improve pedestrian ways, promenades and historic pathways to 
provide a variety of routes through Pier 70 as an integral element of the open 
space network connecting the Pier 70, Mission Bay, Dogpatch, and Potrero Hill 
neighborhoods to the bayfront. 

7. Create interpretation within the open spaces areas about the ship repair 
operations and the site and labor history. 

Transit and Site Circulation Objectives 

/. Increase public transit service by providing ferry and shuttle connections 
between Pier 70 and other public transit hubs. 

2. Extend 19th Street access to ensure continued reliable maritime Industrial 
access to the shipyard. 

3. Extend the street grid from Potrero Hill and the Dogpatch neighborhoods Into 
Pier 70. 

4. Create walkable and bikeable streets. 

5. Introduce a network of pedestrian ways Integrated with new development. 

6. Locate and manage parking facilities to promote shared use and require 
market-rate pricing basis, consistent with smart growth objectives. 

Chapter 5: Implementation Strategy 

This Chapter presents the regulatory partners and their role to implement the Plan, the 
financial feasibility analysis conducted to support the Plan, including the funding tools 
required and an overview of the developer solicitation process considered to move the 
Plan into implementation. 



-7- 



The financial feasibility analysis assumes the Port takes advantage of the financing 
tools afforded by recent legislative successes including the Proposition D, San 
Francisco Charter Amendment, infrastructure financing district, and the Proposition A, 
Park General Obligation Bond funding. 

Excluding the ship repair leasehold, the analysis considers the costs and revenues to a 
developer of Pier 70. The Port will continue to receive rent from Pier 70 at the level it 
does presently, about $3 million annually. Even taking full advantage of the most 
accessible of the public financing tools above leaves a funding gap. Financial feasibility 
analysis currently projects that full build-out will generate a rate of return that falls short 
of that generally required to attract private development partners. This analysis projects 
that land lease revenues from new development, coupled with $310 million in public 
financing and historic tax credits, leave a project feasibility gap estimated at $50 million 
in today's dollars. The Port continues to explore means to improve the financial 
prospects for Pier 70 and expects that its private development partners will creatively 
address this gap. 

Private sector partners will be critical to realizing the Plan. After public and Port 
Commission review of this document. Port Staff will present options for how to best 
choose partners for Pier 70. In particular, the Plan identifies the Union Iron Works 
Machine Shop for a publicly accessible use, such as a cultural activity venue, market 
hall, or institutional use and the Port will seek an appropriate partner to realize this 
vision. 

Acknowledgements 

The Pier 70 Plan is the culmination of the most in-depth analysis for Pier 70, which built 
upon the lessons and inspirations of previous efforts to improve this site. It is the 
product of an extensive community outreach process, which greatly benefitted from the 
support and collaboration with the Port Commission, Mayor Gavin Newsom's office, the 
Board of Supervisors, San Francisco voters, many Federal, State and City public 
agencies, and the Port's consultant team. The Port would like to recognize and thank 
the Port's Central Waterfront Advisory Group, BAE San Francisco Ship Repair, San 
Francisco Architectural Heritage, San Francisco Planning and Urban Research 
Association, San Francisco Tomorrow, Potrero Boosters, Neighborhood Parks Council, 
San Francisco Planning Department, California State Lands Commission, California 
State Office of Historic Preservation and San Francisco Bay and Conservation 
Development Commission. 

Port staff is grateful for the thoughtful, collaborative spirit of the public planning process. 
These partnerships with the development, neighborhood, community, and public 
agency stakeholders will be fundamental to the success of achieving the ambitious 
slate of objectives for Pier 70. 



-8- 



Next Steps 

On July 29, 2009, the Port will hold Its fourth community workshop on the Plan, and will 
conduct additional outreach throughout the summer. Port staff will return at the Port 
Commission's August 1 1 , 2009 meeting to receive Port Commissioner comments and 
direction and comments from the public. The Port is working with the Planning 
Department to schedule additional informational briefings to the San Francisco 
Planning Commission and Historic Preservation Commission. The Port seeks public 
comments on the Plan by August 28, 2009. 

In September, Port staff plans on reporting back to the Port Commission on comments 
received and any further refinements to the Plan. At that time, staff will present 
development solicitation options for the Port Commission's consideration. If supported 
by the Port Commission, the Plan (as may be revised further to respond to public 
comments) will provide the basis for a developer solicitation process for Pier 70. 

Important Dates 

• July 29, 2009: Public Workshop to receive public comments on the Plan; Pier 1 
Bayside conference rooms 6:00 -8:00 PM 

• August 11, 2009: Port Commission public hearing to receive Commission 
comments on the Plan; Port Commission Room, Ferry Building 

• PUBLIC COMMENT DEADLINE: AUGUST 28, 2009. Comments may be 
received in public hearings, writing on online at www.sfport.com/pier70 or to 
david.beaupre@sfport.com. 

• September 2009: Port Staff summary of input received, any revisions to Plan, 
and recommended next steps for Port Commission consideration 



Prepared by: David Beaupre, 

Senior Waterfront Planner 

Prepared for: Byron Rhett, Deputy Director, Planning 
& Development 



-9- 




PORT-- 

SAN FRANCISCO 



MEMORANDUM 

July 7, 2009 

TO: MEMBERS, PORT COMMISSION 

Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Kimberly Brandon 
Hon. Michael Hardeman 
Hon. Ann Lazarus 



,U M 9<4 



FROM: Monique Moyer 

Executive Director 

SUBJECT: Informational presentation regarding parking in the Ferry Building Area 

DIRECTOR'S RECOMMENDATION: Informational only- No Action Required 

SUMMARY 

Since the closure of Pier /4 in July 2008, the Port has made many small changes to 
parking in the Ferry Building Area (including the Ferry Building, Agriculture Building, 
Piers 1 , 1 V2, 3 and 5 as shown on Exhibit A) in order to improve parking conditions for 
visitors and shoppers at the Ferry Building Marketplace and Ferry Plaza Farmer's 
Market. Port staff in conjunction with many partners worked to: 1 ) expand the 
availability of street parking by adding additional spaces, moving farmer trucks off-street 
and installing of new "smart" meters; 2) promote and improve validation programs at 
area garages; and 3) substantially expand Ferry Building valet parking capacity and 
times available. 

The Port continues to work on parking improvements including: 1) enhanced parking at 
Seawall Lot 351; 2) improvements to Ferry Plaza public access including temporary 
parking; and 3) study of transportation and parking as part of Downtown Ferry Terminal 
Project implementation. Throughout these efforts Port staff has endeavored to identify 
specific customers and users that can be served by better use of existing parking 
resources. 

PIER V2 CLOSURE 

Pier Yi, immediately to the north of the Ferry Building, accommodated up to 100 cars as 
the primary parking lot for short-term visitors to the Ferry Building. Although the Port 

The Print Covers Calendar Item No. 88 



OF SAN FRANCISCO 

mm. 



FAX 415 274 0528 



made limited repairs to Pier Va to prepare for the 2003 Ferry Building re-opening, 
between 2003 and 2007 deck failures continued. The Port commissioned a structural 
evaluation of Pier V2 in late 2007 and shared Pier V-is deteriorating condition with the 
Ferry Building tenant - Equity Office Partners (EOP), the Northeast Waterfront Advisory 
Group and the Port Commission. In May 2008, the Port of San Francisco notified EOP 
that the Chief Harbor Engineer had determined a September 12, 2008 closure date for 
Pier V2. 

Initially, both EOP and the Ferry Building merchants called for the continued use and 
repair of Pier Vi. The Port and EOP explored whether repairs could be made including 
further below deck inspections. EOP, after reviewing Pier % condition information, 
closed Pier 'A on July 3, 2008. 

After the July 2008 closure, there was substantial public and merchant concern about 
the loss of parking for the Ferry Building. Port staff took the lead in communicating to 
the public the need for the closure and continuing parking options in the Ferry Building 
Area. The Port posted a notice on its website and explanatory signage at the entrance 
to Pier V2. The Port designed and helped distribute post card maps of publicly available 
parking in the vicinity. Additionally, Port staff briefed the Port Commission, the 
Northeast Waterfront Advisory Group and Ferry Building merchants. 

Since the closure of Pier V2, Port staff has worked closely with stakeholders to identify 
ways to improve parking for the Ferry Building area - particularly on farmers' market 
days. Port staff has endeavored to identify specific customer and user types that can 
be served by better use of existing parking resources such as inexpensive validation at 
distant lots serving workers and price-sensitive customers, and curbside valet service 
for restaurant and less price-sensitive customers. Throughout these efforts the Port has 
focused on better serving Ferry Building area visitors and customers and meeting its 
existing obligations. 

THE PORT'S PARKING OBLIGATIONS 

The Parking Agreement between the Port and Ferry Building Investors, LLC requires 
the Port to make available 150 parking spaces to meet Ferry Building patron needs in a 
specified proximity. This April 10, 2001 agreement identifies several areas for locating 
potential parking spaces and provisions for relocation. As documented in the April 18, 
2003 location notice and agreement, the parties agreed that provision of the spaces at 
Pier V2 and Seawall Lot 351 (Embarcadero at Washington) met the Port's obligation for 
parking. Though there are a number of private parking garages within easy walking 
distance of the Ferry Building, including the Embarcadero Center garage and 75 
Howard Street, the Parking Agreement calls for the Port to provide 1 50 parking spaces 
reasonably within its control including spaces at Pier V2, Seawall Lot 351 , and 1 
Maritime Plaza at 250 Clay Street (now known as the Golden Gateway Garage). The 
agreement recognized that Pier V2 would eventually be unusable and allows for 
relocation of parking within the identified area. The Parking Agreement is a continuing 
obligation unless a new public parking garage to serve the Ferry Building waterfront is 
built. 



-2- 



Following the closure of Pier Yz, and pursuant to the Parking Agreement, the Port 
designated SWL 351 , the white zone in front of the Ferry Building, and 58 spaces in the 
Golden Gateway Garage for use by Ferry Building visitors. San Francisco Municipal 
Transportation Agency (SFMTA), which owns the garage, has offered dedicated 
spaces to EOP for Ferry Building patron use at its authorized rate. 

PARKING ACTIONS SINCE THE CLOSURE OF PIER Vz 

Since the closure of Pier Yi Port staff has worked closely with EOP, Center for Urban 
Education about Sustainable Agriculture (CUESA - the operator of the Ferry Building 
Farmers' Market), SFMTA and other stakeholders to improve parking in the Ferry 
Building area. The parking actions accomplished in the past year are described below. 
Additionally, Port staff continues work toward larger solutions to parking in the Ferry 
Building area. Many of these solutions focus on farmers' market days - Saturdays, 
Tuesdays and now Thursdays - as parking is most scarce at these times. Table 1 
shows the changes to parking options during Saturday morning peak parking. 



Table 1; 



Parking Changes Since Pier V2 Closure: Saturday A.M. Peak 




Before Closure 


After Closure 


Pier 'A (valet)^ 


100 


10 


Seawall Lot 351 *(valet)^ 


110 


110 


Davis St. Meters 





11 


Washington Street Meters^ 





50 


New Embarcadero Meters 





5 


Golden Gate Garage"^ 





40 


Embarcadero Center Garage"* 





40 


Total 


210 


266 



Notes: 

^Pier Yi had 48 self park spaces available for Ferry Building visitors, but accommodated up to 100 cars witti valet. 

About 10 cars are now valet parked on the Pier Yz stub on Saturdays. 

^ SWL 351 is currently striped with 80 self park spots but can accommodate up to 1 10 cars with valet. 

^ Up to 50 meters on Washington Street were used by farmers trucks and are now available to Ferry Building and 

farmers' market patrons on Saturdays and Tuesdays. 

"* CUESA estimates that 40 workers and/or patrons use validated parking at both the Golden Gate and Embarcadero 

Center garages on Saturdays. 



Accessible Parking: Closure of Pier % put most strain on visitors needing accessible 
parking. Working with the Port's ADA coordinator, the Port has repainted the curbs 
between the Agriculture Building and Pier 5 to provide sufficient accessible parking 
("blue zones") for the Ferry Building area. Additionally, the Port added 5 new metered 
spaces available for visitors just north of Pier 1 . 



Golden Gateway Garage: Beginning in July 2008, tiie Golden Gateway Garage 
expanded its weekend validation program, which previously applied to Chinatown and 
North Beach merchants, to include the Ferry Building area. Under this program, 
patrons who secure a validation may park on Saturdays and Sundays until 10:00 pm at 
a rate of $3 per day. The validation program has no cost to the merchants. There is no 
restriction in the number of Ferry Building and Farmers' Market shoppers that may park 
at the 1,095 space Golden Gateway Garage on the weekends. Additionally, in early 
2009, the garage began opening at 7:00 AM on Saturdays to serve farmers' market 
workers and shoppers and typically accommodates about 40 farmers' market worker 
and shopper vehicles. The validated rate increased to $3.50 per day effective July 1, 
2009. The Port is working with SFMTA and the garage operator to improve signage 
and open garage entrances on Washington Street. 

Additional Garage Validation: CUESA and EOP have worked with Embarcadero 
Center and 75 Howard Parking Garages to secure Saturday morning discounted 
parking. In June 2008, Saturday parking rates were lowered at the Embarcadero 
Center 3 and 4 parking garage (870 total spaces) across the street from the Ferry 
Building. These garages open at 7 am and cost $2 per hour for the first two hours and 
$3 per hour thereafter with validation from the Ferry Plaza Farmers Market Information 
Booth. The 75 Howard Parking Garage charges a flat fee of $5 for the first 4 hours on 
Saturday's only. 

Expanded Parking Meter Options: At the Port's request, the City added 1 1 parking 
meters on Davis Street. Additionally, the Port has participated in the SF PARK program 
and has installed new centralized parking meters in the Ferry Building area. When 
these new meters are activated, the Port will collect and analyze user data to set 
variable pricing schemes based on demand. SF Park's variable pricing has a goal of 
85% occupancy to assure available meter parking in most instances. The Port 
anticipates having adequate data to initiate demand-based pricing in Fall 2009. 

Alternative Location for Farmer's Parking: Starting in early 2009, CUESA reduced 
the number of farmer's trucks using meters on Washington Street during the farmers' 
markets. On Saturdays farmer trucks had been using up to 50 metered parking spaces 
on Washington Street. CUESA reduced their use of metered spaces to fewer than 20 
spaces on Saturdays and no spaces on Tuesdays by using garages and maximizing 
parking resources at the rear of Ferry Plaza. 

In June 2009, CUESA and the Recreation & Parks Department (RPD) executed a 
month-to-month permit allowing parking of approximately 20 vehicles on RPD's 
underutilized site adjacent to the F line turn around on Saturday's only, eliminating the 
need for parking meters. Between the new meters on Davis Street and relocation of 
farmer trucks over 60 more parking meters are available during Saturday farmers' 
market. 

Valet Parking: In December 2008 EOP, working with Port staff, expanded its valet 
parking operation in the white zone in front of the Ferry Building. EOP secured a valet 
permit for the entire white zone and developed a curbside validation program for 
patrons to drop off/pick up their vehicles. The program is now available from 9 a.m. to 

-4- 



10 p.m. every day except Sunday serving all Ferry Building visitors including evening 
restaurant visitors. 

On Saturdays EOP experimented with a number of valet programs serving the Saturday 
farmers' market when the white zone is already in use as a "veggie valet" pick up zone 
allowing chefs and shoppers to leave their packages and return in their cars for pickup. 
EOP experimented with valet parking using Golden Gateway and 75 Howard Garages 
as holding areas for vehicles however the return times proved to be too long. Currently, 
Saturday valet parking is available for a limited number of vehicles at the curb in front of 
Pier V2 utilizing the "stub" of Pier V2 and Seawall Lot 351 as storage sites. Since 
December the valet operation has served an average of 1 ,700 customers per month 
with a quarter of users on Saturdays. 

Saturday Parking Shuttle: In 2010 the SF Public Utilities Commission (PUC) plans to 
disrupt parking on SWL 351 as part of their North Force Main project relocating sewer 
lines. ^ This will displace about 40 parking spaces at Seawall Lot 351 . In order to 
mitigate parking impacts of the sewer construction activity on area parking, the PUC will 
fund a Saturday morning parking shuttle bus during Summer 2010. 

CONTINUING PARKING EFFORTS 

Port staff continues to explore expanded parking options in the Ferry Building Area. 
These efforts include exploration with stakeholders in the area. These efforts include: 

Ferry Plaza: EOP has made a proposal to enhance Ferry Plaza public access 
improvements funded through temporary parking on the Plaza. The improvements 
would re-align vehicle access to the center of the plaza, extend the promenade at the 
rear of the Ferry Building southward, and free the south edge of the plaza for exclusive 
pedestrian public access. The proposed improvements would enhance farmers' market 
operations and include accessible parking and areas for bicycle parking. These 
improvements would be paid for through temporary parking (approximately 4 years) of 
up to 65 cars in the center of the plaza. Ferry Plaza is a public access area under the 
Port's Waterfront Land Use Plan and BCDC's Special Area Plan and this proposal is 
subject to BCDC review and permitting. 

SWL 351: After a development solicitation process for SWL 351 the Port selected San 
Francisco Waterfront Partners (SFWP) as the developer for a mixed-use project 
including a 90 space parking garage for the Ferry Building visitors. SFWP's proposal 
includes an alternate proposal including 250 publically accessible parking spaces under 
the combined SWL 351/8 Washington site. As part of exclusive negotiations the Port 
will consider the public benefits and financial implications of SFWP proposal and the 
alternate parking proposal. 

Pier V2\ Since its closure extensive engineering and cost analyses have been 
undertaken. Both Port and EOP engineering consultants estimated repair costs in 



^ This work will remedy a weakness in the system. An emergency repair disrupted parking at SWL 351 
from May 2008 through September - contributing to the scarcity of parking Summer 2008 when EOP 
closed Pier V2. 

-5- 



excess of $3 million. The Port's Waterfront Land Use Plan and BCDC's Special Area 
Plan call for removal of Pier V2. At this time, the Port has not identified a funding 
strategy to rebuild Pier V2. The structurally sound, western most "stub" of Pier V2 is in 
use for valet operations on Saturdays and is available for overflow farmer truck parking 
on Tuesdays. Continued use (or demolition) of Pier V^ will be considered a part of the 
implementation planning for the Downtown Ferry Terminal expansion project discussed 
below. 

FERRY BUILDING AREA IMPLEMENTATION PLAN 

The Port in conjunction with the Water Emergency Transportation Authority (WETA) has 
begun work on the expansion of the Downtown Ferry Terminal. Implementation 
planning is needed to address issues related to the expansion of ferry service, the 
rehabilitation of the Agriculture Building, improvements to Ferry Plaza for public open 
space, as well as the ongoing needs of visitor parking and transportation, public access, 
and emergency preparedness. As part of this effort Port staff is developing a long-term 
land use implementation strategy for the entire Ferry Building area that addresses these 
multiple needs including a circulation system that improves all modes of travel including 
buses, valet, taxis, bicycles and secure storage for bikes, pedestrians, delivery, and 
parking. This analysis will address the long-term parking needs of the Ferry Building 
Marketplace, Farmer's Market and other customers and users of the area. The 
implementation strategy will establish an area parking management program that 
addresses visitor parking needs, accommodates farmer trucks, disabled visitors as well 
as spaces for alternative transportation means (bikes and flex-car options) and buses. 

NEXT STEPS 

Port staff continues to explore opportunities to improve parking in the Ferry Building 
area. As part of the Downtown Ferry Terminal expansion project, Ferry Plaza 
Improvement and SWL 351 projects, staff will present the Port Commission its analysis 
regarding the costs and benefits of parking improvements in the Ferry Building area, 
including any reuse of Pier 34. 



Prepared by: Jonathan Stern, Assistant Deputy Director 
Waterfront Development 

For: Byron Rhett, Deputy Director 

Planning & Development 



Exhibits: A. Location Map 




^^M;^,-r^^^ >,^^ -^.^ 7<'^' J, ^/: 




PORT? 



SAN FRANCISCO 

MEMORANDUM 

July 9, 2009 

TO: MEMBERS, PORT COMMISSION 

Hon. Rodney A. Fong, President 

Hon. Stephanie Shakofsky, Vice President 

Hon. Kimberly Brandon 

Hon. Michael Hardeman 

Hon. Ann Lazarus 




FROM: Monique Moyer 

Executive Director 

SUBJECT: Request approval of the Municipal Debt Policy for the Port of San 
Francisco 

DIRECTOR'S RECOMMENDATION: Approve Attached Resolution and Adopt the 
Attached Municipal Debt Policy 

Background 

On July 1, 2009 the Port made its final payment on its $19.94 million Refunding 
Revenue Bonds. Currently the Port has no outstanding bonded indebtedness. 

On April 25, 2006 the Port Commission adopted the Port's first ten-year capital plan. 
The purpose of the plan is to identify the major maintenance and capital improvement 
needs of the Port's facilities, prioritize capital projects, and identify potential funding 
sources. The maintenance and improvements will bring the facilities up to current 
building code standards, including seismic requirements. The latest annual update to 
the plan was adopted by the Port Commission on February 24, 2009. The plan identifies 
$2.0 billion in improvements, approximately $650 million of which are expected to be 
funded through a combination of the Port's operating budget, future Port revenue bonds. 
Port tenants, public/private development projects, and Infrastructure Financing District 
bonds. 

Port staff anticipates issuing new bonded debt in the fall of 2009. This anticipated new 
financing will be the first of several bond issues that are expected over the next several 
years. As described in Item 9B of the July 14, 2009 Port Commission agenda, the net 
proceeds from these new bond offerings will be used to pay for five of the projects 
identified in the ten-year capital plan. 







This Print Covers Calendar Item No. 9A 




rOF SAN FRANCISCO 








M . 




FAX 415 274 0528 







The Proposal 

Port staff is proposing that the Port Commission adopt a debt policy, prior to any new 
issuance of municipal debt. The purpose of such a policy is to provide comprehensive 
guidelines for the issuance and management of the Commission's bonds and other debt 
obligations. Port staff is seeking approval of the proposed Port municipal debt policy 
which is attached to this staff report. 

The proposed municipal debt policy is intended to help ensure that: i) the Port 
Commission and Port staff adhere to sound debt issuance and management practices; 
ii) the Port Commission achieves the lowest practical cost of borrowing commensurate 
with prudent levels of risk; iii) the Port obtains unfettered access to the debt markets by 
preserving and enhancing the quality of the Port's bonds and other debt; and iv) Port 
debt municipal issuance and management practices are formally documented, and 
made more transparent to debt rating agencies, investors, and the public. 

Highlights of the Proposed Municipal Debt Policy 

The proposed municipal debt policy includes the following provisions: 

1 . Legal Framework : Outlines the legal framework governing the issuance of municipal 
debt by the Port Commission including the legal authority, and the need to comply 
with applicable laws, and Port Commission agreements. 

2. Approval Process : Establishes the requirement that: i) the Port Commission approve 
all projects to be financed by Commission issued debt; ii) each proposed debt issue 
be approved by the Port's Deputy Director of Finance and Administration, and 
Executive Director before it is submitted to the Port Commission for approval; and iii) 
each debt issuance be approved by the Port Commission. 

3. Debt Affordabilitv Targets : Establishes limits on the amount of Port municipal debt 
that can be issued and outstanding at any one time. 

4. Purposes. Tvpes. Terms and Provision of Port Municipal Debt : Identifies the 
permitted uses for Port debt, the types of debt instruments that the Port Commission 
may issue, the appropriate terms and provisions for such debt, and the methods of 
sale for the Commission's bonds. 

5. Permitted Investment of Bond Proceeds and Other Debt-Related Funds : Establishes 
the requirement that investment of bond proceeds, held outside of the City Treasury, 
adhere to the City's Investment Policy. Establishes minimum requirements for 
investment providers, requirements for investment agreements, and requires that the 
purchase of investment products and services be competitively bid. 

6. Financial Professional Services : Identifies the categories of professional services 
that periodically may be required to assist Port staff in the issuance and management 
of the Port's municipal debt, and requires that these services be procured through a 
competitive process. 



7. Communication with the Public : Establishes requirements for the disclosure of 
financial statements and other financial and operating data to public. Requires that 
the Port comply with Security and Exchanges Commission rules regarding continuing 
disclosure of financial information to holders of Port debt and the investing public. 

8. Financial Modeling : Requires that the Deputy Director of Finance and Administration 
develop and maintain a financial model to evaluate the financial impact on the Port's 
budget of proposed debt issues. 

9. Periodic Review : Provides for periodic review and, if needed, update of the Port's 
municipal debt policy. Requires that the municipal debt policy be submitted to the 
Port Commission at least once every five years for review and re-approval. 

Recommendation 

Port staff recommends that the Port Commission approve the attached resolution and 
adopt the attached proposed municipal debt policy. 



Prepared by: Lawrence Brown, Principal Administrative Analyst 

For: Tina Olson, Deputy Director 

Finance and Administration 



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PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 09-38 



WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



RESOLVED, 



On April 25, 2006 the Port Commission adopted the Port's first ten-year 
capital plan; the purpose of which is to identify the major maintenance 
and capital improvement needs of the Port's facilities, prioritize capital 
projects, and identify potential funding sources; and 

The latest annual update to the ten year capital plan adopted by the 
Port Commission on February 24, 2009 identified $2.0 billion in 
improvements, approximately $650 million of which are expected to be 
funded through a combination of the Port's operating budget, future 
Port revenue bonds. Port tenants, general obligation bonds, 
public/private development projects, and Infrastructure Financing 
District bonds; and 

The Port Commission's outstanding Refunding Revenue bonds were 
repaid in full on July 1, 2009, and Port staff anticipates issuing new 
bonded debt in the fall of 2009; and 

This anticipated new bond issue will be the first of several bond issues 
that are expected over the next several years, the net proceeds of 
which will be used to pay for a portion of the projects identified in the 
Port's ten-year capital plan; and 

The Port Commission wishes to have a debt policy in place before any 
new issuance of Port debt to provide comprehensive guidelines for the 
Port staff for the issuance and management of bond and other debt 
obligation of the Port Commission; and 

The debt policy will help ensure that: i) the Port Commission and staff 
adhere to sound debt issuance and management practices; ii) the 
Commission achieves the lowest practical cost of borrowing 
commensurate with prudent levels of risk; iii) the Port obtains 
unfettered access to the debt markets by preserving and enhancing the 
quality of the Port's bonds and other debt; and iv) the Port's debt 
issuance and management practices are formally documented, and 
made more transparent to debt rating agencies, investors, and the 
public; now, therefore, be it 

That the Port Commission hereby adopts the municipal debt policy as 
developed by staff and attached to the staff report dated July 9, 2009, 
accompanying this resolution; and, be it further 



RESOLVED, The Port staff will periodically review the municipal debt policy, and 
return to the Port Commission within five years for re-approval of the 
existing or an updated version of the municipal debt policy as 
applicable. 



/ hereby certify the foregoing resolution was adopted by the Port Commission at 
its meeting of July 14, 2009. 



Secretary 

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Port Commission of the City and County of San Francisco 
Municipal Debt Policy 

Datedasof July 1,2009 

I. Introduction & Legal Authority 

The purpose of this Municipal Debt Policy (the "Municipal Debt Policy") of the 
Port Commission (the "Commission") of the City and County of San Francisco 
(the "City") is to establish comprehensive guidelines for the issuance and 
management of the Commission's debt. 

The Commission has authority to borrow money and issue debt payable from its 
revenues for Port-related purposes pursuant to Sections 9.111, 9.112, B6.406 
and B7.305 of the City Charter. Port revenue bonds may be issued without voter 
approval pursuant to Section 9.107.4 of the City Charter. 

This Municipal Debt Policy confirms the commitment of the Commission, the Port 
Executive Director (the "Executive Director"), other Port management and staff, 
and advisors to: i) adhere to sound debt issuance and management practices, 
including the full and timely repayment of all borrowings; ii) achieve the lowest 
practical cost of borrowing commensurate with prudent level of risk; and 
ill) obtain unfettered access to the capital markets through preserving and 
enhancing of the quality of the Port's bonds and other debt. 

II. Municipal Debt Policy Scope 

This Municipal Debt Policy shall govern the issuance and management of all of 
the debt and capital lease financings of the Commission funded from the capital 
markets, together with all obligations and facilities related to those debt and 
equipment lease financings, including, but not limited to, investment of bond 
proceeds. While adherence to this Municipal Debt Policy is required under 
normal circumstances, the Commission recognizes that changes in the capital 
markets. Port programs, and other unforeseen circumstances may produce 
situations that are not covered by this Municipal Debt Policy, or require 
modification in order to achieve the Port's Municipal Debt Policy goals. Thus, the 
Commission may, upon recommendation of the Executive Director, approve 
financing and other related agreements with terms and/or provisions that deviate 
from this Municipal Debt Policy. The failure of the Commission to comply with 
any provision of this Municipal Debt Policy shall not affect the validity of any debt 
that is otherwise duly authorized and executed. 

III. Municipal Debt Policy Objectives 

The objectives of this Municipal Debt Policy are as follows: 

a. Maintain unfettered, cost-effective access to the capital markets through 
prudent debt management policies. 



b. Provide financial support for the Port's strategic and capital plan objectives 
through debt and equipment lease financing. 

c. Provide guidelines for the overall management of the Port's debt. 

d. Achieve the highest practical credit ratings and the lowest possible costs. 

IV. Compliance with Law and Commission Agreements 

All Commission debt shall be issued in accordance with the City Charter, and all 
Federal and State laws (including laws relating to State lands) rules and 
regulations including the Internal Revenue Code of 1986, the Securities Act of 
1934, and the Securities Exchange Act of 1933; in each case as supplemented 
and amended, and regulations established pursuant to such laws. Debt of the 
Commission shall also be issued in compliance with other agreements of the 
Commission including those with credit or liquidity providers, and those of the 
City. 

V. Appropriate Use of Debt 

Port debt shall only be used for the following purposes: i) to finance capital 
improvement projects undertaken by the Port including the construction, major 
repair, or enhancement of Port facilities; ii) to finance the acquisition of capital 
assets; iii) to finance the purchase of capital equipment; iv) to refinance 
previously issued Commission debt; and v) to finance other large and 
extraordinary costs as determined by the Commission such as legal judgments 
or settlements. 

Long term debt shall never be used to fund operating costs. 

The Commission shall use proceeds of debt issues in a manner that is consistent 
with the then applicable Federal tax laws with respect to such debt. More 
specifically, the Commission shall use proceeds from governmental purpose 
bonds for public use projects. Proceeds from private activity (which are usually 
subject to alternative minimum tax) bonds shall be used for qualified exempt 
facility private activity projects, and proceeds from taxable bonds shall be used 
for other authorized uses that are not otherwise permitted for financing from 
government use or private activity bonds. 

VL De bt Ap p ro va I P roced u res 

a. Staff Level Review and Approval 

The Port's Capital Project Budget Committee, consisting of the Port's five 
deputy directors and the Chief Harbor Engineer, must review and recommend 
for funding all capital projects and capital equipment purchases being 
considered for debt financing. All proposed debt issuances by the 
Commission, including refinancings, shall be submitted to and approved by 
the Port's Deputy Director of Finance and Administration and Executive 
Director prior to submission to the Commission for approval. 

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b. Commission Approval 

Commission authorization and approval is required for all projects financed by 
debt issued by the Commission. All proposed debt issuances will be 
submitted to the Commission for its approval and authorization. The 
Commission by majority vote shall approve a resolution authorizing each such 
issuance. 

VII. Types of Borrowing 

The following categories of debt refer to the form of revenue source, type of debt 
(new money vs. refunding), lien, and mode (fixed rate vs. variable rate). 

A. Port Revenue Bonds 

Port Revenue Bonds are long term debt obligations that are repayable solely 
from the general revenues of the Port and, if applicable, grant or other third 
party funds. The Commission may issue Port Revenue Bonds to fund capital 
improvement projects, purchases of large scale capital equipment, and other 
costs of the Port. Neither the credit nor the taxing power of the City, the State 
of California or any political subdivision of the State shall be pledged or made 
available to pay or secure Revenue Bonds of the Commission, unless 
specifically authorized. 

B. Special Facility Bonds 

Special Facility Bonds are long term debt obligations used to finance a 
specific Port project or facility. A distinguishing characteristic of Special 
Facility Bonds is that they are repayable solely from revenues generated by 
the facility or stand alone project to be financed by the bonds, rather than 
from general Port revenues. 

The use of Special Facility Bonds is appropriate when the following conditions 
are met: i) revenues of the facility or project to be financed can be identified 
and segregated from the general Port revenues, ii) projected revenues from 
the facility will be sufficient to fully pay debt service during the entire term of 
the bonds, and pay all facility operating and maintenance costs, and iii) 
projected Port revenues, excluding the Special Facility revenues, will be 
sufficient for the Commission to comply will all covenants with respect to its 
other outstanding debt. Port staff shall use its outside financial advisors 
("Financial Advisors") to assist it in verifying that the above conditions are met 
prior to the issuance of any Special Facility Bonds. 

C. Equipment Lease Financing 

Lease obligations are an appropriate means of financing capital equipment. 
A capital lease is a fixed-term, non-cancelable lease that is similar to a loan 
and is used for the acquisition of capital assets such as equipment. Under a 
capital lease, the title (or ownership) of the assets purchased remains with the 
lessor during the lease period. At the end of the lease the lessee has the 
option to acquire ownership of the assets by paying a small pre-determined 
amount to the lessor. 

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The Commission may enter in a capital lease and/or implement a master 
capital lease program to finance the acquisition of capital equipment. These 
types of obligations can be considered for equipment and assets as an 
alternative to other debt financing such as revenue bonds. Only high priority 
equipment with a useful life of 5 years or greater will be capital lease 
financed. Lease finance contracts or programs will be at least $300,000 in 
size, and the term of lease will not exceed the average useful life of the 
equipment being financed. Equipment with a useful life of less than 5 years 
will be funded on a pay-as-you-go basis. Short term operating leases for 
equipment are not covered by this policy. 

D. New Money Bonds 

New Money bonds are bonds issued to finance the cost of capital 
improvement projects or any other purpose outlined in Section V of this 
Municipal Detjt Policy. The issuance of new money bonds will generally 
result in an increase in the amount of Port debt outstanding, in contrast to 
refunding bonds, which simply refinance previously issued debt. 

E. Refunding Bonds 

Refunding bonds are bonds issued to refinance (or refund) previously issued 
and currently outstanding debt. The Commission may issue refunding bonds 
to refinance the principal of and interest on outstanding bonds or other debt of 
the Commission in order to (i) achieve debt service savings; (ii) restructure 
scheduled debt service; (iii) convert from or to a variable or fixed interest rate 
structure; (iv) change or modify the source or sources of payment and 
security for the refunded debt; or (v) modify covenants otherwise binding 
upon the Commission. Refunding Bonds may be issued either on a current or 
advance basis, as permitted by applicable Federal tax laws. The Commission 
may also utilize a tender offer process to refund bonds that are not otherwise 
subject to optional call by the Commission. 

Refunding Bonds to be issued solely to achieve debt service savings shall not 
be issued unless the estimated net present value savings, as determined by 
the Port's Financial Advisors, are either (i) equal to at least 3% of the principal 
amount of the refunded Bonds; or (ii) equal to at least 1 % of such principal 
amount, and it is unlikely, in the judgment of the Financial Advisors, that a 
future refunding would realize greater savings 

F. Senior Lien Debt 

Senior Lien Debt is the most senior debt issued by the Commission in terms 
of lien and order of repayment. The Commission may issue senior lien debt 
in order to achieve the most advantageous borrowing costs. 

G. Subordinate Lien Debt 

Subordinated lien debt is debt that is subordinate (junior in terms of priority of 
lien and repayment) relative to some or all of the then outstanding debt of the 
Commission. Such debt would be issued in instances where the Commission 

-4- 



has determined that it is necessary or desirable to accommodate the 
particular structure or terms of a given issue, or in circumstances where the 
issuance of senior lien Bonds would be limited or restricted. 

An example of a Port subordinated lien debt was the $12 million bank loan 
that the Port secured in 1998 to fund the move of the Port's maintenance 
facility to Pier 50, and the purchase a land parcel in connection with the 
construction of the SF Giants baseball stadium at China Basin. The loan was 
secured by Port revenues, however, because the Port Revenue bonds had a 
senior lien on those revenues, the bank loan was subordinated to the 
outstanding revenue bonds. 

H. Long Term Debt 

For purposes of this municipal debt policy, long term debt is defined as bonds 
or other debt with a final maturity of 5 years or more. The Commission may 
issue debt with longer-term maturities to amortize Port capital or other costs 
over a period commensurate with the expected life, use or benefit provided by 
the projects, programs or facilities financed from such bonds. 

I. Short Term Debt 

For purposes of this municipal debt policy, short-term debt is defined as any 
debt with a final maturity of less than 5 years The Commission may issue 
debt with shorter-term maturities, including commercial paper and grant and 
revenue anticipation notes, to provide interim financing for capital projects in 
anticipation of the issuance of longer-term bond or other debt and/or the 
receipt of grant or other third party moneys. 

J. Fixed Rate Borrowings 

Fixed rate borrowings are debt issuances that pay a fixed rate of interest. 
Fixed rate borrowing may utilize one or more series of bonds with differing 
maturities, all of which pay a fixed rate of interest. Fixed-rate debt shall be 
the primary type of debt issued by the Commission to assure future costs and 
to insulate the Port from interest rate risk. 

K. Variable Rate Borrowings 

Variable rate borrowings are debt issuances whose interest rate vary from 
day to day, week to week, or some other period, based on pre-determined 
market indices and conditions. Variable rate bonds are typically issued using 
a letter of credit, which assures the liquidity needed for such debt, and also 
typically enhances the credit quality of the debt. Variable rate debt can be 
issued to reduce an issuer's overall bowing costs, becausfe, over the long 
term, variable rate debt has been historically cheaper than fixed rate debt. 
However, this must be balanced with a consideration of how the issuer will 
manage the risk associated with the variability of the cost of variable rate 
debt. 

The Commission may from time to time issue variable rate debt when such 
issuance is considered desirable. The Commission shall limit its variable rate 

-5- 



debt exposure to no more than 10% of the aggregate outstanding principal 
amount of its long-term debt, determined as of the date of issuance or 
execution of the variable rate debt. 

L. Additional Types of Borrowings 

Assessment district bonds such as Mello Roos and special assessment 
bonds may be issued by creating a district in which the land-owners and 
others within the district agree to tax themselves, through the ad valorem 
property tax, at a higher rate in order to repay debt issued to finance capital 
improvements. These financing methods are widely used in the State of 
California, most typically to pay for infrastructure costs for limited areas that 
need public improvements in order to stimulate private investment. 

The Commission may issue Mello-Roos Bonds and special assessment 
bonds such as Infrastructure Financing District Bonds as appropriate in 
support of its development and capital improvement programs. The 
Commission may also incur bank financing (either long or short term), and 
may enter into memorandum of understanding (MOD) agreements with the 
City or any of its departments or agencies for the issuance of debt on the 
Port's behalf if the following conditions are met. 

i. Proceeds from the debt issuance are only made available to the Port 
for Port-related capital improvement projects or other purposes as 
described in Section V of this Municipal Debt Policy, 

ii. Such debt is issued in accordance with the City Charter, and; 

iii. Port revenues are to be used to repay the debt issued. 

VIII. Debt Affordablllty Targets and Policy Limits 

Unless changed by Commission action, it is the policy of the Port to meet the 
targets listed below. These limits, in combination with the Port's annual updated 
10 year capital plan, and multi-year planning, will ensure that the Port continues 
to provide essential operational services while planning for replacement, 
rehabilitation, repair and expansion of its capital investments. 

1. The Port will maintain a minimum Debt Service Coverage of 1.15x taking into 
account all of its outstanding debt. The actual terms and conditions specific 
to each debt issue will be controlled by the applicable documents. 

2. The Port will maintain a minimum unappropriated operating reserve of 15% of 
its annual operating expenditure budget. 

3. So long as the above conditions are met, the Port will seek to minimize the 
level of debt outstanding consistent with the most recently updated 10 year 
capital plan. 



IX. structuring Considerations 

A. Long-Term Debt 

i. Term: up to 35 years depending on cash flow assumptions, construction 
timeline and remaining useful life of the asset being financed. The 
weighted average maturity of such debt should not exceed 120% of the 
reasonably estimated weighted average life, use or benefit (measured in 
years) of the projects, programs and/or facilities financed from the 
proceeds of such debt. 

ii. Maximum Yield: not to exceed 12%. 

iii. Coupons: fixed rate or variable. 

iv. Call Provisions: shortest possible optional call consistent with optimal 
pricing; no more than 30 days notice. 

v. Structure of Debt: combined interest and principal payments will be 
structured to have approximately level debt service payments - unless 
otherwise dictated by underlying remaining useful lives of the assets 
financed. Exceptions may occur for refunding debt. 

vi. Debt Service Reserve: lesser of 10% of the principal amount, 125% of 
the average annual debt service, 100% of the maximum annual debt 
service, or a surety bond. 

A surety bond avoids unnecessarily increasing the size of the bond 
issue, however, the surety bond may require an upfront fee payment to 
the insurer, and it results in the loss of any future interest income as 
compared to a cash-funded debt service reserve (DSR). The Director of 
Finance and Administration, with the assistance of the Port's financial 
advisors, will evaluate and document the DSR funding decision. Factors 
to be considered include arbitrage yield restrictions, current interest 
rates, availability and cost of a surety bond, perceived stability of the 
provider, and opportunities for alternative uses of the DSR funds 
including funding of additional capital projects. 

vii. Capitalized Interest: sized through substantial completion of the capital 
improvements financed plus a minimum of six months unless other 
assets are available. 

viii Net Funding: the project and capitalized interest funds may be reduced 
by the amount of projected interest earnings if investments are secured 
upon issuance of bonds. 

ix. Reimbursement Resolution: adopted by the Port Commission to 
preserve the ability to capture expenditures made (after such date of 
adoption) by the Port and make them eligible for reimbursement from 
future bond proceeds in conformance with tax law requirements. 

X. Good faith deposit: 1 % of the par amount. 

xi. Budgeting Debt Service: The Port's annual budget shall include gross 
debt service for the outstanding debt. 

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B. Variable Rate Debt 

i. Purpose: reduction of net borrowing cost; match of assets and liabilities 

ii. Max. Portfolio Allocation: no more than 10% of the Port's outstanding 
debt portfolio shall be in variable rate debt. 

ill. Term: consistent with policies for underlying debt types. 

iv. Maximum Yield: not to exceed 12%. 

V. Monitoring: the Port shall monitor all variable rate bonds on a monthly 
basis and shall determine, from time to time, whether to change modes, 
alter hedging strategies and/or replace a remarketing agent. 

vi. Remarketing Provisions: the Port seeks to obtain remarketing agent 
agreements containing a provision requiring the remarketing agent(s), in 
the event of a failed remarketing, to purchase the Port's bonds, at 
prevailing interest rates, for up to 30 days. The purpose of such 
provision is to allow the Port ample time to convert illiquid bonds to an 
alternative, marketable mode before incurring liquidity rates. 

vii. Call/Conversion Provisions: on any date without penalty; with as short of 
a notice period as possible. 

viii. Liquidity: a liquidity facility shall be obtained, either externally or 
internally, for all short-term indebtedness containing a put feature. 
Liquidity providers shall maintain the short-term ratings and long-term 
ratings as defined in Section XII (A) of this Municipal Debt Policy. 

ix. Disclosure: the Port shall covenant to provide continuing disclosure in 
accordance with its customary practices for any short-term debt with a 
final, stated maturity exceeding 3 years. 

x. Mode: all bonds issued as variable rate bonds shall be issued as "multi- 
modal" bonds. 

Methods of Sale for Port Bonds 

There are three principal methods for the sale of Bonds: (i) competitive, (ii) 
negotiated, and (iii) private placement. The Commission shall utilize the method 
of sale that (a) is reasonably expected to produce the most advantageous 
interest cost with respect to the Bonds, and (b) provides the Commission with the 
flexibility necessary or desirable in connection with the structuring, timing or 
terms of such sale and of the related Bonds. 

A. Competitive Sale 

The competitive sale of the Commission's Bonds will be appropriate under the 
following circumstances: 

1 . The Bonds are traditional long-term fixed-rate new money revenue bonds; 

2. The Bonds are senior lien obligations of the Commission; 

3. The Bonds do not include any unusual call provisions or other terms; 

-8- 



4. The Bonds are or will be rated no lower than an "A" category or equivalent 
by at least two of the three major credit rating agencies, or the Bonds will 
or can be insured by a Bond Insurer which is rated "AAA" or equivalent by 
at least two of the three major credit rating agencies; 

5. Prices in the municipal bond market are relatively stable; 

6. Market timing is not critical to the pricing of the Bonds; and 

7. The municipal bond market is in a period of sufficient stability and 
receptivity to the rating assigned to the Port's bonds that a competitive 
sale is deemed to be advantageous. 

Competitive sales may be conducted in such manner as the Commission 
shall approve, including through internet-based or other electronic bidding 
systems. 

B. Negotiated Sales 

The negotiated sale of the Commission's Bonds will be appropriate under the 
following circumstances: 

1 . The Bonds are not traditional long-term fixed-rate new money revenue 
bonds; 

2. The Bonds are not senior lien obligations of the Commission; 

3. The Bonds include unusual call provisions or other terms; 

4. The Bonds are or will be rated below an "A" category or equivalent by at 
least two of the three major credit rating agencies; 

5. Prices in the municipal bond market are relatively volatile; 

6. Market timing is important to the pricing of the Bonds; 

7. Volume in the municipal bond market is unusually heavy or unusually light; 

8. The structure of the financing is complex or unusual, and is expected to 
require additional pre-marketing and marketing efforts and activities; 

9. Demand for the Bonds is expected to be weak, as a result of credit issues, 
market perceptions, unusual structures or other factors; 

10. The sale of the Bonds must be coordinated with other related transactions, 
such as a tender offer for outstanding Bonds, the closing of an acquisition 
of property or facilities to be acquired from the proceeds of the Bonds, or 
related transactions; and/or 

1 1 .The expected demand for the Bonds is from retail rather than institutional 
investors; and/or 

12. The impetus for the transaction has been the result of significant 
innovation and efforts provided by one or more underwriter(s). 

The underwriter or underwriters for a negotiated sale of Bonds (the 
"Underwriters") may be selected from a pre-qualified pool of underwriters with 

-9- 



experience and expertise in connection with tlie particular type of Bonds 
being offered for sale. 

Port staff, with the assistance of its Financial Advisors, shall evaluate the 
proposed pricing and other terms offered by the Underwriters in relationship 
to prevailing market prices on the date of sale and prevailing practices in the 
municipal bond marl<et, in each case with respect to comparable issuers. 

If there are multiple Underwriters, the Port, with its Financial Advisors, shall 
establish appropriate levels of liability, participation and the priority of orders 
among the Underwriters. The senior managing underwriter shall provide Port 
staff with a summary of all orders, allocations and underwriting activities with 
respect to the sales, a copy of the pricing wire, and the total designations and 
compensation to each underwriter promptly following the closing with respect 
to the Bonds. 

The senior managing underwriter and/or the Port's Financial Advisors shall 
also provide Port staff with a pricing analysis promptly following the closing, 
including without limitation the results of comparable sales in the market at or 
near the time of the Commission's sale. 

C. Private Placements 

The private placement of the Commission's Bonds (as opposed to the public 
offering of Bonds through a competitive or negotiated sale) will be appropriate 
only in circumstances where: (i) a public offering would require the 
registration of the Bonds under applicable Federal securities laws, or (ii) the 
Bonds are or will be either unrated or rated in a category below investment 
grade. In the event such circumstances arise, the Bonds of the Commission 
may be sold pursuant to a private placement only under such terms and 
conditions and in such manner as the Commission shall determine, in 
consultation with its Financial Advisors. 

XI. Pricing of Port Debt 

A. Bonds 

The Commission's Bonds may be sold at such prices, including at par, a 
premium or a discount, as the Commission may determine is likely to produce 
the most advantageous cost, inclusive of interest and all fees and charges, 
under then prevailing market conditions. 

B. Other Port Debt 

Other debt issued or incurred by the Commission will be priced at the lowest 
practical cost, inclusive of interest and all fees, under then prevailing market 
conditions. 



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XII. Credit Enhancement of Port Debt 

The Commission may secure credit enhancement for its bonds or other debt from 
third-party credit providers when it provides an economic advantage, to the 
extent that such credit enhancement is available at reasonable, competitive, and 
cost-effective terms. Credit enhancement may take the form of municipal bond 
insurance ("Bond Insurance"), stand-by or direct pay letters of credit, and lines of 
credit (collectively and individually, "Credit Facilities"), as well as other similar 
instruments. Credit enhancement providers shall be selected on a competitive 
basis. 

A. Credit Facilities 

The issuance of certain types of bonds or other debt require a stand-by letter 
of credit, direct pay letter of credit, or line of credit (a credit facility) from a 
commercial bank or other qualified financial institution. The purpose of these 
facilities is to provide liquidity and/or credit support for the debt issuance. The 
types of debt issuance where a credit facility may be necessary include 
commercial paper, variable rate bonds with a tender option , and bonds that 
would not receive an investment grade credit rating in the absence of such a 
facility. The criteria for selecting a Credit Facility provider shall include: 

1 . Long-term credit ratings of "A1/A+" or better from at least two of the 
following credit rating agencies: Standard and Poor's, Moody's Investor 
Services and Fitch Ratings; 

2. Short term rating from at least two of the three rating agencies mentioned 
in XII (A)1 above, of at least "P-1/A-1/F-1" or equivalent; 

3. Experience in providing such facilities to state and local government 
issuers; 

4. Pricing of the facility, including without limitation initial and on-going costs 
of the credit facility; draw, transfer, and related fees; legal counsel fees; 
termination fees and any trading differential; and 

5. Willingness to agree to the terms and conditions proposed or required by 
the Commission. 

B. Bond Insurance 

All or any portion of a bond issue may be secured by bond insurance 
provided by municipal bond insurers if it is economically advantageous to do 
so, or if it is otherwise deemed necessary or desirable in connection with a 
particular issue of bonds. Bond Insurance providers must have long-term 
credit ratings of "AA-" or equivalent from at least two of the three major credit 
rating agencies. The relative cost or benefit of bond insurance may be 
determined by comparing the amount of the bond insurance premium to the 
present value of the estimated interest savings to be derived as a result of the 
insurance. 

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Xlli. Derivatives 

Financial derivative products can be beneficial interest rate management tools 
that can assist the Port as part of its overall debt and investment management 
policy. However, these products need to be monitored very closely, and they 
have their own set of risks that need to be thoroughly understood before they can 
be used effectively. Therefore, the Commission shall not authorize the use of 
any financial derivative until such time as Port staff has developed, and the 
Commission has adopted, a financial derivatives policy. 

XIV. Investment of Bond Proceeds and Permitted Investments 

A. Permitted Investments 

All investments of bond proceeds held outside of the City Treasury shall 
adhere to the City's Investment Policy as approved periodically by the City 
Treasury Oversight Committee. With the exception of investment contracts, 
investment of Port bond proceeds shall not allow security types or credit 
standards less than those of the City's Investment Policy. 

B. Purchase of Investments 

The Commission shall competitively bid the purchase of securities, 
investment agreements, forward purchase contracts, and other investments 
products used to invest bond proceeds. The Commission shall comply with 
all applicable Federal, State, and contractual restrictions regarding the use 
and investment of bond proceeds including, but not limited to: i) compliance 
with restrictions on the type of permitted investments, ii) restrictions on 
allowable yield of some invested funds, and iii) restrictions on the time period 
allowed for the investments of some bond proceeds. 

C. Diversification 

The Commission shall diversify invested proceeds in order to reduce risk 
exposure to providers, types of investment products, and types of securities 
held. 

D. Disclosure 

The Commission shall require that all fees resulting from providing investment 
services or the sale of products to the Port be fully disclosed to ensure that 
there are no conflicts of interest, and that investments are being purchased at 
a fair market price. 

E. Structure of the Investment Agreements 

The Commission may enter into investment agreements for the following 
purposes: a) to maximize interest earnings thereby reducing net borrowing 
costs, b) to match assets and liabilities, or c) for hedging. All investment 
agreements entered into by the Commission shall be structured as follows: 

1 . Investment Provider: Minimum ratings of AA- from at least two of the 

three major credit rating agencies. 

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2. Mandatory Termination: Limited to non-payment and credit-related 

events. 

3. Cure Provisions: Timelines on Commission's obligations to cure 

must provide for appropriate approvals and 
legislative action, if applicable. 

4. Priority of Payment: Termination payments to be subordinate to related 

debt payments. 

5. Award: Based on best bid as defined in the bid form after 

limited negotiation of terms. 

6. Term: Not to exceed the term of the related debt. 

XV. Professional Services 

The Commission may retain professional services providers as necessary or 
desirable in connection with (i) the structuring, issuance and sale of its bonded 
debt; (ii) monitoring of and advice regarding its outstanding bonds; and (iii) the 
negotiation, execution and monitoring of related agreements, including without 
limitation bond insurance, credit facilities, investment agreements; and (iv) other 
similar or related matters. Professional service providers may include financial 
advisors, bond counsel, disclosure counsel, Port consultants, bond trustees and 
Federal arbitrage rebate services providers, and may include, as appropriate, 
underwriters, feasibility consultants, remarketing agents, auction agents, broker- 
dealers, escrow agents, verification agents and other similar parties. 

Professional service providers shall be selected pursuant to a competitive 
selection process. The criteria for selection of professional services providers 
shall include, among other things, their relative experience with and expertise 
regarding the Port, comparable port issuers, and the Commission's various types 
of outstanding and proposed bonds 

The Commission shall require that its financial advisors, bond and disclosure 
counsel, and Port consultants be free of any conflicts of interest, or that any 
necessary or appropriate waivers or consents are obtained 

A. Financial Advisors 

The Commission shall have one or more Financial Advisors to provide 
ongoing advisory services with respect to the Commission's outstanding and 
proposed Bonds and related agreements, including without limitation Credit 
Facilities, investment agreements and other similar matters. 

B. Bond Counsel. Disclosure Counsel and Other Legal Counsel 

i. Bond Counsel: The City Attorney shall procure on behalf of the 
Commission one or more bond counsel law firms to provide ongoing 
legal advisory services with respect to the Commission's outstanding 
and proposed Bonds and related agreements, including without limitation 
credit facilities, investment agreements, and other similar matters. All 

-13- 



bonds issued by the Commission shall require a written opinion from the 
Port's bond counsel, as appropriate, regarding (i) the validity and binding 
effect of the bonds, and (ii) the exemption of interest from Federal and 
State income taxes. 

il. Disclosure Counsel: The City Attorney shall procure on behalf of the 
Commission a disclosure counsel law firm to provide ongoing legal 
advisory services with respect to initial and continuing disclosure in 
connection with the Commission's outstanding and proposed Bonds. 
Such firm may be one of the Commission's bond counsel firms. The 
issuance of Bonds by the Commission shall require a written opinion 
from the Commission's disclosure counsel, as appropriate, regarding (i) 
the exemption of the Bonds from registration requirements under 
Federal securities laws, and (ii) their absence of knowledge, after due 
review, regarding any material misstatement in or omission from the 
official statement or other public offering document with respect to the 
Bonds. 

III. Other Legal Counsel: The Port shall utilize the City Attorney for ongoing 
legal advisory services with respect to the Commission's other (non- 
Bond) outstanding and proposed debt and related agreements. Other 
debt issued by the Commission may require a written opinion from the 
City Attorney, as appropriate, regarding (i) the validity and binding effect 
of the debt, and (ii) the exemption of interest from Federal and State 
income taxes, if applicable. 

The Commission may encourage or require, as appropriate, the 
retention and use of legal counsel by other parties involved in the 
issuance of Port debt, and the execution of related agreements that are 
approved by the Commission. 

C. Bond Trustees and Fiscal Agents 

The Commission may engage bond trustees and/or fiscal agents, paying 
agents and tender agents, as necessary or appropriate, in connection with the 
issuance of its Bonds. Bond trustees and fiscal agents shall be federally- 
chartered banks with a minimum capitalization of $100 million. 

D. Underwriters 

The Commission may engage a team of underwriters, including a senior 
managing underwriter, in connection with the negotiated sale of its Bonds. 
The Commission also may engage one or more underwriters, as necessary or 
appropriate, to serve as remarketing agents, broker-dealers or in other similar 
capacities with respect to variable rate demand bonds, commercial paper and 
other similar types of Bonds issued by the Commission. 

E. Feasibility Consultants 

The Commission may retain feasibility consultants with specialized expertise 
in connection with any proposed project, programs, facilities or activities to be 
financed in whole or in part from proceeds of debt. The criteria for the 

-14- 



selection of such feasibility consultants, in addition to those set forth above, 
shall include their expertise and experience with projects, programs, facilities 
or activities similar to those proposed to be undertaken by the Commission. 

F. Arbitrage Rebate Service Providers 

Because of the complexity of the Federal arbitrage rebate statutes and 
regulations, and the severity of potential penalties for non-compliance, the 
Commission may retain an arbitrage rebate services provider in connection 
with its outstanding and proposed Bonds, and may also solicit related legal 
and tax advice from the City Attorney and/or the Commission's bond counsel. 
The responsibilities of the arbitrage rebate services provider shall include: (i) 
the periodic calculation of any accrued arbitrage rebate liability and of any 
rebate payments due under and in accordance with the Internal Revenue 
Code and the related rebate regulations; (ii) advice regarding strategies for 
minimizing arbitrage rebate liability; (iii) the preparation and filing of periodic 
forms and information required to be submitted to the Internal Revenue 
Service; (iv) the preparation and filing of requests for reimbursement of any 
prior overpayments; and (v) other related matters as requested by the 
Commission. 

The Commission shall maintain necessary and appropriate records regarding 
(i) the expenditure of proceeds of Bonds, including the individual projects and 
facilities financed and the amounts expended thereon, and (ii) investment 
earnings on such Bond proceeds. The Commission shall maintain such 
records for such period of time as shall be required by the Internal Revenue 
Code. 

G. Other Professional Services 

The Commission may retain such other professional services providers, 
including without limitation verification agents, escrow agents, auction agents, 
as may be necessary or appropriate in connection with its Bonds or other 
debt. 

XVI. Market Relationships 

A. Rating Agencies 

The Deputy Director of Finance and Administration will be responsible for 
maintaining the Port's relationships with Moody's Investors Service, Standard 
& Poor's and Fitch Ratings. The Port may, from time-to-time, choose to deal 
with only one or two of these agencies as circumstances dictate. In addition 
to general communication, the Deputy Director of Finance and Administration 
will meet with credit analysts from the rating agencies: i) at least once each 
fiscal year to update the agencies on the Port's business operations and 
financial condition, and ii) prior to each competitive or negotiated sale. 

All efforts will be made to accommodate reasonable requests for information 
from rating agencies. Communication may take the form of conference calls, 
one-on-one meetings, and Port tours. 

-15- 



B. Credit Enhancers. Current and Prospective Investors and Other Market 
Participants 

The Deputy Director of Finance and Administration will be responsible for 
maintaining the Port's relationships and reputation with institutions which 
credit enhance or may credit enhance the Commission's debt, current and 
prospective investors in the Commission's debt and other market participants. 
When and if appropriate, communication with institutional investors may take 
the form of conference calls, one-on-one meetings. Port tours, and "virtual" 
road shows. 

XVII. On-Going Debt Administration 

A. Continuing Disclosure 

The Port will remain in compliance with the Securities and Exchange 
Commission Rule 15c2-12 by filing its annual financial statements and other 
financial and operating data for the benefit of its bondholders and the 
investing public in a timely manner. While there is reliance on timely audit and 
preparation of the Port's annual continuing disclosure report, the Deputy 
Director of Finance and Administration will ensure the Port's timely filing of 
the following items on the Electronic Municipal Market Access (EMMA) 
website of the Municipal Securities Rulemaking Board (MSRB): 

i. The Port's annual disclosure report and associated materials, filed no 
later than 270 days following the end of the Port's fiscal year; 

ii. Changes in ratings by any of the credit rating agencies described in the 
Glossary of Terms which is attached to this Municipal Debt Policy; and 

iii. Material or other events for which notification to bondholders and 
investors is required in accordance with Rule 15c2-12. 

The Deputy Director of Finance and Administration will also ensure that the 
Port's annual financial statements, annual disclosure report, and associated 
materials are posted on the Port web site. 

B. Arbitrage Rebate Compliance and Reporting 

The use and investment of bond proceeds must be monitored to ensure 
compliance with arbitrage restrictions. Existing regulations require that 
issuers calculate rebate liabilities related to any bond issues, with rebate paid 
to the Federal Government every five years and as otherwise required by 
applicable provisions of the Internal Revenue Code and regulations. The 
Deputy Director of Finance and Administration shall ensure that proceeds and 
investments are tracked in a manner that facilitates accurate, complete 
calculation; and, if necessary, timely rebate payments. 

Arbitrage rebate liability shall be calculated annually in each year that a bond 
construction fund (or equivalent) has had an outstanding balance. Thereafter, 

-16- 



the Port shall calculate arbitrage rebate liability on the fifth anniversary of the 
bond issue in accordance with IRS recommended practices. 

C. Insurance Certificates 

The Port, through the City's Risk Manager, will provide annual insurance 
certification to Bond Trustees, and holders of other Port debt as and when 
required. 

D. Reporting 

i. Ratings: The Deputy Director of Finance and Administration will 

promptly report credit agency ratings on new debt issues, and any rating 
changes on existing debt to: i) the Commission, ii) the Executive 
Director, and iii) the City's Office of Public Finance. 

ii. Material Event: The Deputy Director of Finance and Administration will 
promptly report any Rule 15c2-12 Material Event to : i) the Commission, 
ii) the Executive Director, iii) the City's Office of Public Finance, and iv) 
Electronic Municipal Market Access (EMMA). 

E. Financial Modeling 

The Deputy Director of Finance and Administration shall develop and 
maintain a five-year financial model to evaluate the financial impact on the 
Port's budget of proposed Bond issues and related expenditures, including 
without limitation debt service, revenues, operation and maintenance 
expense, and other related effects. 

F. Outstanding Bonds Database 

The Deputy Director of Finance and Administration shall maintain detailed 
information regarding the Commission's outstanding Bonds; including, without 
limitation, the following information with respect to each issue: 

1. Name; 

2. Initial principal amount, and principal amount for each maturity; 

3. Dated date; 

4. Purpose or purposes; 

5. Type of issue, including new money or refunding, fixed rate or variable 
rate, and other features; 

6. Method of sale; 

7. True interest cost, arbitrage yield, and weighted average maturity; 

8. Principal amount currently outstanding, in the aggregate and by maturity; 

9. Debt Service Reserve Fund balance; 

10. Underwriters and underwriters' discount; 

1 1 . Interest rates by maturity; 



-17- 



12. Call provisions, including any mandatory sinking fund provisions; and 

13. Bond insurance or Credit Facilities, if any. 

XVIII. Relationship with the City's Office of Public Finance 

The Deputy Director of Finance and Administration shall maintain 
communications with the City's Office of Public Finance, through periodic 
meetings, conference calls and status reports, and may consult with such Office 
regarding the proposed issuance of bonds and other debt, credit and rating 
strategies, and other related matters. The Deputy Director of Finance and 
Administration shall provide the City's Office of Public Finance with copies of all 
preliminary and final Official Statements, financial statements, continuing 
disclosure reports, and notices of material events in connection with the 
Commission's Bonds. 

XIX. Periodic Review 

The Deputy Director of Finance and Administration shall review this Municipal 
Debt Policy on a periodic basis, and recommend any changes to the Executive 
Director and the Commission for consideration. This Municipal Debt Policy, 
including any proposed changes or additions hereto, shall be presented to the 
Commission at least once every five years for re-approval. The Municipal Debt 
Policy shall be posted in the Finance & Administration section of the Port's 
website at www.sfport.com . 



-18- 



PORT COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO 

MUNICIPAL DEBT POLICY 
GLOSSARY OF TERMS 

Advance Refunding: 

For purposes of certain tax and securities laws and regulations, a refunding in 
which the refunded issue remains outstanding for a period of more than 90 days 
after the issuance of the refunding issue. The proceeds of the refunding issue 
are generally invested in Treasury securities or federal agency securities 
(although other instruments are sometimes used), with principal and interest from 
these investments being used (with limited exceptions) to pay principal and 
interest on the refunded issue. Bonds are "escrowed to maturity" when the 
proceeds of the refunding issue are deposited in an escrow account for 
investment in an amount sufficient to pay the principal of and interest on the 
issue being refunded on the original interest payment and maturity dates, 
although in some cases an issuer may expressly reserve its right (pursuant to 
certain procedures delineated by the Securities and Exchange Commission) to 
exercise an early call of bonds that have been escrowed to maturity. Bonds are 
considered "pre-refunded" when the refunding issue's proceeds are escrowed 
only until a call date or dates on the refunded issue, with the refunded issue 
redeemed at that time. 

Amortization: 

The gradual reduction in principal of an outstanding debt according to a specific 
repayment schedule, which details specific dates and repayment amounts on 
those dates. 

Bond Counsel: 

The legal firm that provides an opinion as to the tax status, authenticity and 
legality of a bond or note issue as of the date of its issuance. 

Bond Insurance: 

A financial guaranty issued by a private insurance company that guarantees the 
timely payment of principal and interest for a debt issue. In the event that an 
issuer is unable to make a timely payment, the company issuing the bond 
insurance is responsible to make the payment. 

Call Provisions: 

Mandatory or optional provisions that allow or require an issuer to prepay or 
refinance a bond prior to its stated maturity date. These provisions identify which 
bonds may be called, when they may be called, and what premium, if any, must 
be paid upon redemption prior to the stated maturity date of the bond. 

Capitalized Interest: 

Specific interest payments of a bond issue which are funded in advance, or 
capitalized, through proceeds of the same bond issue. These proceeds are set 
aside in a specially designated fund in order to pay these designated interest 

G-l 



PORT COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO 

MUNICIPAL DEBT POLICY 
GLOSSARY OF TERMS 

payments. In other words, the bond issue pays for itself for a designated period 
of time. 

Commercial Paper: 

Promissory notes issued by state and local governments to finance construction 
of facilities, which are secured by pledged revenues of the issuer and a credit 
agreement. Commercial paper is issued with a short maturity of 270 days or less 
from the date of issue. 

Competitive Sale: 

A method of sale in which an issuer solicits bids from underwriters to purchase its 
debt offering via electronic bidding, or other type of auction method. The issue is 
awarded to the bidder judged to have submitted the best bid by offering the 
lowest interest rate, taking into account underwriting spread, interest rates and 
any discounts or premiums. A competitive sale is most frequently used when the 
credit structure of the issue is relatively simple, market conditions are stable and 
the issue is highly rated or insured. 

Coupon: 

A colloquial term for a bond's interest rate. Historically, the coupon was a 
detachable part of a certificated security that evidenced interest due. 

Credit Rating Agencies: 

Firms that evaluate the credit quality and ability of debt issuers (corporations and 
governments) to repay obligations as well as their likelihood of defaulting on an 
obligation. The three major credit rating agencies are Moody's Investor Service, 
Standard and Poor's and Fitch Ratings, Inc. 

Current Coupon Bonds: 

Traditional "plain vanilla" bond issues where the bond's coupon is set at a fixed 
rate to maturity at the time of its issuance and immediately, upon issuance, 
begins to accrue interest, which is payable on pre-set interest payment dates. 

Current Refunding: 

A refunding transaction where the municipal securities being refunded will all 
mature or be redeemed within 90 days or less from the date of issuance of the 
refunding issue. 

Debt Affordability: 

The principal amount of debt that an issuer can afford within the constraints of 
net revenues and debt service coverage requirements. 



G-2 



PORT COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO 

MUNICIPAL DEBT POLICY 
GLOSSARY OF TERMS 

Debt: 

A promise to pay back a specified sum of borrowed money, or the principal loan 
amount, according to a specified repayment schedule. For public entities, debt is 
usually incurred with a specific principal and interest repayment schedule. 

Debt Service Coverage: 

The ratio of the net revenue stream pledged against a debt to the debt service 
payments of the debt. Debt service coverage ratios are most often used by 
rating agencies to determine repayment sufficiency with respect to bonds 
secured by a specific revenue stream. 

Debt Service Reserve Fund: 

Traditional bond issues are structured with a debt service reserve fund, which 
assures the timely availability of sufficient moneys for the payment of debt 
service in the event that an issuer cannot make the required debt service 
payment(s). Typically, the required size of the reserve fund is determined by the 
lesser of: 100% of maximum annual debt service; 125% of average annual debt 
service; or 10% of the aggregate issue price. Reserve funds are usually fully 
funded out of bond proceeds and are set-aside in a separate fund held by the 
issue's trustee. Interest earned on the debt service reserve fund, as long as the 
debt service fund is fully funded, can be used to offset debt service payments. 

Defeasance: 

Termination of the rights and interests of the bondholders and of their lien on the 
pledged revenues or other security in accordance with the terms of the bond 
contract for an issue of bonds. Defeasance usually occurs in connection with the 
refunding of an outstanding issue after provision has been made for future 
payment of all obligations under the outstanding bonds through funds provided 
by the issuance of a new series of bonds. 

Derivative Product: 

A product, such as an option or futures contract, whose value is derived from the 
performance of an underlying security. A commonly used derivative is an 
interest rate swap 

Disclosure Counsel: 

The legal firm that provides the legal disclosure documentation for an issue, most 
often in the form of the preliminary and final official statement and continuing 
disclosure agreement, for dissemination to the public. 

Discount Rate: 

The interest rate used for adjusting for the time value of money for net present 
value calculations, option pricing models and other market models. The term 

G-3 



PORT COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO 

MUNICIPAL DEBT POLICY 
GLOSSARY OF TERMS 

"discount rate" can also refer to the rate that the Federal Reserve Bank charges 
its members for overnight deposits. 

Financial Advisor: 

Generally, an independent consulting firm that advises an issuer on financial 
matters ranging from the comprehensive financial health of an issuer to specific 
financings. Financial Advisors are generally not part of the underwriting syndicate 
that markets financings for an issuer. 

Float Contracts: 

A contract which gives an investment provider the right to invest, for certain time 
periods, certain uninvested moneys. Generally, a float period is a period of time 
in which moneys of an escrow or similar vehicle are uninvested. 

Good Faith Deposit: 

A sum of money or, alternatively, a surety bond provided to an issuer of a new 
issue of municipal securities by an underwriter or underwriting syndicate (i.e.; 
group of underwriters) as an assurance of performance on its offer to purchase 
the issue. Good faith deposits generally are required in connection with 
competitive sales and sometimes in connection with negotiated sales. 

Hedging: 

A strategy designed to reduce investment risk. A hedge can help reduce the risk 
and volatility of a portfolio. A common hedging strategy includes matching the 
amount of short-term assets (cash, investments) with the amount of short-term 
variable rate debt outstanding. Thus, as short-term interest rates fluctuate, the 
portfolio's interest earnings on its short-term assets match its interest payments 
on its short-term obligations. 



Institutional Investor: 

A term that generally refers to banks, financial institutions, bond funds, insurance 
companies or other business organizations that possess or control considerable 
assets for large scale investing. 

Investment Agreement: 

A contract between an investment provider and their client specifying the rights 
and responsibilities of each party in the structuring and operation of an 
investment product. 

Letter of Credit: 

Two types of letters of credit are used in bond and other debt financings; standby 
letters of credit and direct pay letters of credit. They provide credit enhancement 

G-4 



PORT COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO 

MUNICIPAL DEBT POLICY 
GLOSSARY OF TERMS 

for the debt issues by shifting the risk of repayment from the issuer (or entity who 
receives the debt proceeds) to the bank issuing the letter of credit. Letters of 
credit are usually required for the issuance of variable rate debt. Letters of credit 
also are used to provide liquidity. 

A standby letter of credit (standby L/C) is an agreement issued by a commercial 
bank that commits the bank to pay third party (the beneficiary) contingent upon 
the failure of bank's customer to perform under the terms of a contract or 
agreement with the beneficiary. Used as a substitute for a performance bond or 
payment guarantee, standby L/Cs are used mainly in the U.S. where banks are 
legally barred from issuing certain types of guarantees. For bond or debt holders 
it serves as a secondary source of payment, in case the issuer fails to meet its 
payment obligations. As such, it serves as a source of credit enhancement for 
the debt issuance. Standby L/Cs also provide liquidity for bond holders in cases 
where bond tendered cannot be remarketed within the required timeframe. 

A direct pay letter of credit (direct pay L/C) is an agreement issued by a 
commercial bank that commits the bank to pay third party (the beneficiary) upon 
a request presented by the beneficiary to the bank issuing the L/C. In the context 
of debt issuance, the direct pay L/C bank stands between the debt holders and 
the debt issuer insuring that the debt holders are paid. The debt holders draw on 
the direct pay L/C for the payment of principal and interest on their debt. The 
direct pay L/C bank relies on same day reimbursement from the debt issuer (or 
entity who received the debt proceeds) for the payment made to the debt 
holders. 

Line of Credit: 

An arrangement in which a bank or other financial institution extends a specified 
amount of unsecured credit to a specified borrower for a specified time period. 

Liquidity Facility: 

Variable rate securities are often secured by a liquidity facility, either in the form 
of a standby letter of credit or a line of credit. Such credit enhancement assures 
note holders that in the event of a tender and failed remarketing, funds will be 
available to purchase the notes on the tender date, with the issuer becoming 
obligated to the letter of credit or line of credit bank on a prearranged basis. 

Long Term Debt: 

Loans and other financial obligations with a maturity of longer than one year; 
usually accompanied by interest payments. 



G-5 



PORT COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO 

MUNICIPAL DEBT POLICY 
GLOSSARY OF TERMS 

Maturity Date: 

The date upon which a specified amount of debt principal or bonds matures, or 
becomes due and payable by the issuer of the debt. 

Negotiated Sale: 

A method of sale for bonds, notes or other financing vehicles in which an issuer 
selects in advance, on the basis of proposals received or by other means, one or 
more underwriters to work with it in structuring, marketing and finally offering an 
issue to investors. The negotiated sale method is often used when the issue is: a 
first time sale by a particular issuer (a new credit), a complex security structure, 
such as a variable rate transaction, an unusually large issue, or in a highly 
volatile or congested market. 

Net Revenue: 

Gross revenues less operating and maintenance expenses. 

Official Statement: 

A comprehensive statement issued by a governmental entity prior to the sale of 
bonds, notes or other financing vehicles that contains all the salient facts 
concerning the issuer, the issuer's financial condition, the security pledged for the 
securities being offered, the projected use of the proceeds of the sale, and other 
facts deemed necessary to enable the investor to judge the quality of the 
securities being offered. Also known as the Disclosure Statement. 

Par: 

1 00 percent of the face value of a security. 

Present Value Analysis: 

An analysis used to determine the value today of a future payment, or to a 
stream of payments, discounted at some appropriate compound interest - or 
discount rate. 

Private Placement: 

A private placement is a variation of a negotiated sale in which an issuer, usually 
with the help of a financial advisor or placement agent, will attempt to place the 
entire issue directly with an investor. The investor will negotiate the specific 
terms and conditions of the financing before agreeing to purchase the issue. 

Redemption: 

Depending on an issue's call provisions, an issuer may on certain dates and at 
certain premiums, redeem or call specific outstanding maturities. When a bond 
or certificate is redeemed, the issuer is required to pay the maturities' par 

G-6 



PORT COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO 

MUNICIPAL DEBT POLICY 
GLOSSARY OF TERMS 

amount, the accrued interest to the call date, plus any premium required by the 
issue's call provisions. 

Remarketing Agent: 

A broker-dealer responsible for reselling to new investors securities (such as 
variable rate demand obligations and other tender option bonds) that have been 
tendered for purchase by their owner. The remarketing agent also typically is 
responsible for resetting the interest rate for a variable rate issue and also may 
act as tender agent. 

Retail Investor: 

Any customer other than an institutional customer. Retail customers generally 
include individual investors and small organizations. 
Rule15c2-12: 

A Securities and Exchange Commission obligation on public issuers of securities 
to provide annual updating of financial information and operating data of the type 
included in the official statement for the primary bond offering. The issuer is 
obligated to provide a notice of the occurrence of certain material events. 

Rule 15c2-12 Material Event: 

Certain events affecting a municipal debt issuance are required to be disclosed 
to debt holders and investors under a continuing disclosure agreement meeting 
the requirements of Rule 15c2-12. These events include the following, if 
material: i) principal and interest payment delinquencies; ii) non-payment related 
defaults; iii) unscheduled draws on debt service reserve funds reflecting financial 
difficulties; iv) unscheduled draws on credit enhancements reflecting financial 
difficulties; v) substitution of credit or liquidity providers, or their failure to 
perform; vi) adverse tax opinions or events affecting the tax-exempt status of the 
debt; vii) modifications to rights of the debt holders; viii) bond calls; ix) 
defeasances; x) release, substitution, or sale of property securing repayment of 
the underlying debt; xi) rating changes; and xii) failure to provide annual 
financial information as required. 

Securities: 

Instruments of debt or ownership sold or traded on publicly organized exchanges 
and/or in over-the-counter markets. 

Senior Lien Debt: 

Debt whose terms require it to be repaid with a priority claim on pledged 
revenues. 



G-7 



PORT COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO 

MUNICIPAL DEBT POLICY 
GLOSSARY OF TERMS 

Short-Term Debt: 

Generally, debt which matures in one year or less. However, certain securities 
that mature in less than five years may be considered short-term debt. 

Subordinate Lien Debt: 

Debt whose terms require it to be repaid with pledged revenues net of the 
amount necessary to make debt service payments on senior lien debt. 

Surety Bond: 

An alternative to a fully funded debt service reserve fund. A surety bond can be 
purchased from a bond insurance provider to fulfill the role of a debt service 
reserve fund and can be drawn upon in the event an issuer cannot make a 
regularly scheduled debt service payment. A surety bond must be purchased 
and is subject to credit approval by a bond insurance provider. The provider 
charges an upfront fee for the surety bond of approximately 3.00% to 5.00% of 
the debt service reserve requirement. 

Tender: 

With variable rate debt, a bond or note holder has the option of tendering or 
putting his or her bonds or notes back to the remarketing agent upon specific 
dates (monthly, weekly) for the full par amount held. The remarketing agent then 
re-offers the tendered notes to investors. The proceeds received by the 
remarketing agent from the sale of the tendered notes are paid to the tendering 
note holder in full satisfaction of the obligation to purchase the notes on the 
tender date. A new interest rate is set at the lowest rate necessary to remarket 
the tendered notes at par. 

Tender Agent: 

In the case of tender option bonds, an agent of the issuer to whom bondholders 
tender their bonds upon a mandatory or optional tender. In many cases, the 
tender agent will also act as the remarketing agent for the bonds. In the case of 
a tender offer, a broker-dealer or bank responsible for coordinating the process 
of soliciting bondholders. 

Tender Option: 

A provision in a bond contract under which the investor has the right, on specified 
dates after required notification, to surrender (or sell) the securities to the issuer 
(or someone acting on the issuer's behalf, such as a tender agent) at the 
predetermined price (usually par). This is sometimes referred to as an "optional 
tender" or a "put option." Tender options are generally backed by a bank 
standby letter of credit or line of credit. 



G-8 



PORT COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO 

MUNICIPAL DEBT POLICY 
GLOSSARY OF TERMS 

Trading Differential: 

The interest rate spread between similar bond/note maturities based upon 
differences in credit quality, state tax issues and tax-exempt status of various 
bond issues. 

Underwriter: 

A securities dealer who purchases a bond or note issue from an issuer and 
resells it to investors. If a syndicate or selling group is formed, the underwriter 
who coordinates the financing and runs the group is called the senior or lead 
manager. 

Variable Rate Demand Bonds (or Notes): 

Variable rate demand bonds, which are often referred to as floating rate debt, are 
instruments that provide the purchaser with an option to tender or "put" the bonds 
back to the issuer, at par, at the end of each tender or "re-set" period. For 
example, an issue with a term of 30 years could have a tender period that is 
daily, weekly, monthly, quarterly or semi-annually. Since the variable rate bonds 
give the purchaser the option of a put at par at the end of each tender period, the 
yield on each bond approximates the yield on comparably rated securities having 
a final maturity equal to the selected tender period. In other words, a holder of 
an issue with a weekly tender period is only entitled to a seven-day interest rate. 
Variable rate issues can be viewed as short-term instruments containing a built-in 
refinancing mechanism. 

Weighted Average Maturity: 

With respect to an issue of bonds, the weighted period of time required to repay 
half of the issue through scheduled principal payments (e.g., maturity, sinking 
fund redemption, etc.). The weighted average maturity, also referred to as the 
"weighted average life" or "average life" reflects how rapidly the principal of an 
issue is expected to be paid. Under one commonly used calculation method, 
average life is equal to the total bond years divided by the total number of bonds 
(one bond equals $1 ,000 par amount, regardless of actual denomination). Note 
that this computation method does not take into account the time value of the 
principal amounts. The formula for this computation is: 

Weighted average maturity = Total Bond Years 

Number of Bonds 

Example: 

For each specific maturity, bond years = the amount of principal 
maturing in that year X the number of years from the closing date of 
the bond issue to the specific maturity. 

G-9 



PORT COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO 

MUNICIPAL DEBT POLICY 
GLOSSARY OF TERMS 





Principal 


Bond 


Period 


Maturinq 


Years 


1 


2,000,000 


2,000,000 


2 


4,000,000 


8,000,000 


3 


6.000.000 


18.000.000 


Totals 


12,000,000 


28,000,000 



Weighted average maturity (or average life) = 28,000,000/12,000,000 = 2.333 years. 



Yield: 



The net rate of return, as a percentage, received by an investor on an 
investment. Yield calculations on a fixed income investment, such as a bond 
issue, take purchase price and coupon into account when calculating yield to 
maturity. 



G-IO 



Port Commission of the City and County of San Francisco 

IViunicipai Debt Policy 

Guide to Credit Agency Ratings 



Long Term Debt Ratings 

Financial Strength/Debt Service Repayment Characteristics 


S&P 


Moody's 


Fitch 


The highest rating awarded by the respective credit rating 
agency. Debt carries the lowest degree of investment risk. 
Obligor's capacity to meet its financial commitments is 
extremely strong, and this capacity is highly unlikely to be 
adversely affected by foreseeable events. 


AAA 


Aaa 


AAA 


The obligor's capacity to meet its financial commitments is very 
strong and risk of default is very low. Financial capacity is not 
significantly vulnerable to foreseeable events. This category is 
distinguished from the category above in the margin of 
protection, which is not as large, or the long term risks appear 
to be greater as that of the higher category. 

Debt in this category, together with debt in the category above, 
are generally referred to as high grade obligations. 


AA 


Aa 


AA 


The capacity of the obligor for payment of financial 
commitments is considered to be strong. However, this 
capacity is more vulnerable to adverse business or economic 
conditions than is the case for debt in the higher rated 
categories. Debt in this category are considered to be upper 
medium grade obligations. 


A 


A 


A 


The obligor's risk of default is low, and its capacity to meet its 
financial commitments is considered to be adequate at present. 
However, adverse business or economic conditions are more 
likely to impair its capacity to meet financial obligations. 

Debt in this category is neither highly protected not poorly 
secured, and are considered to be medium grade obligations. 


BBB 


Baa 


BBB 


Debt in the Above Categories are Considered Investment Grade Obligations 
Debt in the Categories Below are Considered to be Speculative Obligations 


Debt in this category is more susceptible to default, particularly 
in the event of adverse changes in business or economic 
conditions. Often the obligor's capacity to meet interest and 
principal payment is only moderate. Debt in this category, 
however, is less vulnerable to default than debt in the lower 
speculative categories. 


BB 


Ba 


BB 


There is a material risk of default present for debt in this 
category, but a limited margin of safety remains. The obligor 
currently has the capability to meet its financial commitments, 
however, the capacity for continued payment is vulnerable to 
deterioration in the business and economic environment. 


B 


B 


B 



RG-1 



Port Commission of the City and County of San Francisco 

IVIunicipal Debt Policy 

Guide to Credit Agency Ratings 



Long Term Debt Ratings (cont) 

Financial Strength/Debt Service Repayment 
Characteristics 


S&P 


Moody's 


Fitch 


Debt in this category is currently vulnerable to default. The 
obligor is dependent upon favorable business, financial, and 
economic conditions to meet its financial commitment on the 
obligation. 


ccc 


Caa 


CCC 


Debt in this category is highly vulnerable to default. 


CO 


Ca 


CC 


Default is imminent or inevitable. This rating category may also 
be used to cover situations where: i) the obligor has entered 
into a grace or cure period following non-payment of a material 
financial obligation; ii) the obligor has entered into a temporary 
negotiated waiver or standstill agreement following a payment 
default on a material financial obligation; iii) the obligor has 
filed a bankruptcy petition, but payment on the debt are being 
continued. For Moody's this is the lowest rated class of debt. 


c 





C 


Debt is in nonpayment default. 


D 


- 


D 


Modifiers 








Long term debt ratings from AA to COG may be modified by 
following signs to show the relative strength within a ratings 
category. 


+ or- 




+ or- 


Long Term ratings from Aa to Caa may be modified to show the 
relative strength within a ratings category 1 indicates debt at 
the higher end of the category, and 3 indicates debt at the 
lower end. 




1.2,3 




Short Term Debt Ratings (debt maturing in one year or 

less) 

Financial Strength/Debt Service Repayment 

Characteristics 


S&P* 


Moody's 


Fltch 


The issuer has strong capacity for timely payment of financial 
commitments. In the case of S&P and Fitch a "+" may be 
added to those debt issues with exceptionally strong credit 
protection characteristics. 


A-1 


P-1 


F-1 


The issuer has good capacity for timely payment of its financial 
commitments, however, the degree of safety regarding timely 
repayment is not as high as those issues rating in the higher 
category. 


A-2 


P-2 


F-2 


The issuer has adequate capacity for timely payment of its 
financial commitments. Variability in earnings and the 
profitability of the issuer may result in changes in the level of 
safety regarding timely repayment. 


A-3 


P-3 


F-3 


Debt in the Above Categories are Considered Investment Grade Obligations 


* in the case of S&P, ratings are for commercial paper issues only. 



RG-2 



Port Commission of the City and County of San Francisco 

IVIunicipal Debt Policy 

Guide to Credit Agency Ratings 



Short Term Debt Ratings (debt maturing one year or less) 
(cent) 

Financial Strength/Debt Service Repayment 
Characteristics 


S&P* 


l\/loody's 


Fitch 


Debt in the Categories Below are Considered to be Speculative Obligations 


The issuer has minimal capacity for timely payment of financial 
commitments, and has an increased vulnerability to near term 
adverse changes in financial and economic conditions. Timely 
payment is considered speculative for debt issues with this 
rating. 


B 


NP 


B 


Capacity for payment is considered doubtful for debt issues 
with this rating. 


C 


NP 


C 


Debt is in nonpayment default. 


D 


NP 


D 


* in the case of S&P, ratings are for commercial paper issues only. 


Short Term Debt Ratings (debt maturing in one year or 
less) 

Financial Strength/Debt Service Repayment 
Characteristics 


S&P** 




The issuer has strong capacity for timely payment of its 
financial commitment. A "+" may be added to those debt 
issues with exceptionally strong credit protection 
characteristics. 


SP-1 


The issuer has good capacity for timely payment of financial 
commitments, however, the degree of safety regarding timely 
repayment is not as high as those issues rating in the higher 
category. 


SP-2 


The issuer has minimal capacity for timely payment of financial 
commitments. Timely payment is considered speculative for 
debt issues with this rating. 


SP-3 


** ratings are for short term debt other than commercial paper. 









RG-3 




SAN FRANCISCO 

MEMORANDUM 

July 9, 2009 

TO: MEMBERS, PORT COMMISSION 

Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Kimberly Brandon 
Hon. Michael Hardeman 
Hon. Ann Lazarus 

FROM: Monique Moyer a I p^W^ 

Executive Director ^ 

SUBJECT: Request approval of the Port's Proposed 2009/10 Revenue Bond Projects 

DIRECTOR'S RECOMMENDATION: Approve the attached resolution 

Background 

Section 9.1 12 of Article IX of the City and County of San Francisco's Charter entitled 
"Revenue Bonds of the Port Commission" gives the Port Commission (the 
"Commission") "exclusive power to perform or accomplish the issuance of revenue 
bonds for Port-related purposes." The purpose of this item is to seek Port Commission 
approval of the list of projects to be funded with Port revenue bonds (the "Projects"). 
This legislation does not bind the Port Commission to make any expenditure, incur any 
indebtedness or proceed with the Projects. 

Port Revenue Bonds - Definitions and Debt Capacity 

The proposed Port revenue bonds (the "Bonds") will be debt that the Port repays from 
(and is secured by) the Port's existing general operating revenues. The Port's net 
revenues^ over the past five years have been between $12 and $18 million. However, 
given the recent economic downturn, it is likely that the Port's actual FY 2008-09 net 
revenues will be less than the Port experienced the prior five years. Thus, 
conservatively assuming annual net revenues of $10 million, a 6% interest rate, and a 
1 .30 debt service coverage requirement, the Port's fully-leveraged debt capacity is 
$106.4 million of which $95 million would be available to cover project costs and $11.4 
million to fund debt issuance costs and a debt service reserve fund. Under this scenario, 
the annual debt service capacity would be $7.7 million. The Port's FY 2009-10 budget 
includes approximately $4.7 million for debt service. Making the same assumptions 

This Print Covers Calendar Item No. 9B 



^ For purposes of determining debt capacity, net revenues are defined as operating revenues less 
operating expenses. 



[OF SAN FRANCISCO 






FAX 415 274 0528 



noted above, $4.7 million in annual debt service will allow the Port to issue $66 million in 
revenue bonds of which $60 million would be available to fund project costs and $6 
million^ to fund bond issuance costs and a debt service reserve fund. 

Issuing revenue bonds at a $4.7 million annual cost rather than funding smaller capital 
projects allows the Port to fund more improvements sooner. In other words, the Port 
could use the $4.7 million budgeted for debt service payments in FY 2009-10 to fund 
capital projects such as repairing aprons and roofs or portions of the projects listed 
below often referred to as pay-as-you-go. It would take almost 13 years of spending 
$4.7 million annually on capital improvement projects to reach the $60 million the Port 
will be able to spend through issuing revenue bonds. The Port would not be able to 
efficiently and effectively deliver a larger project such as the cruise terminal through 
annually allocating $4.7 million to fund a portion of the project. For example, there are 
economies of scale associated with issuing one construction contract versus several 
construction contracts. In addition, inflation erodes the value of $4.7 million such that 
the present value of $4.7 million 13 years from today is worth considerably less. Thus, 
while the Port could allocate $4.7 million annually to smaller capital projects, as 
described in more detail below, the Port can accomplish significantly more by allocating 
that $4.7 million towards annual debt service to fund larger projects that will help the 
Port grow its annual revenues and improve the City's waterfront sooner and more 
efficiently. In addition, the benefits of these projects accrue over 30 years, matching the 
debt and project costs to the 30-year lifespan of the projects. 

Allocation of Revenue Bond Proceeds 

As previously noted, the Port is in a position to issue up to approximately $66 million in 
Port revenue bonds^ beginning in FY 2009-10 for which Port staff propose to fund the 
following five projects totaling $60 million: 

Cruise Terminal at Pier 27"^ $22,000,000 

A new, state-of-the-art sustainable multi-use 

cruise terminal at Pier 27, the location 

recommended by the Port's Cruise Terminal 

Advisory Panel and the berth utilized by the 

Queen Mary II in 2007. The project includes 

constructing the Northeast Wharf Plaza on the 

western corner of Pier 27 and a restaurant 

adjacent to the Northeast Wharf Plaza. 

Piers 19 or 23 18,000,000 

Port managed development of an 
underutilized pier. The Project includes 
substructure repairs and upgrades to one pier 
only. Port staff will recommend selection of 



^ $4.7 million for a debt service reserve fund and $1.3 million to cover debt issuance costs. 

^ As previously noted, the par bond amount would be $66 million of which $60 million would be available to fund 

project costs. 

" The proposed $22 million of revenue bond funding for the Cruise Terminal project represents partial funding. The 

Port has already allocated to the Cruise Terminal project $20 million from receipts associated with the sale of the 

Watermark Condominiums located at Bryant Street and The Embarcadero. 

-2- 



Pier 19 or 23 after completing a planning 
process with the San Francisco Bay 
Conservation and Development Commission 
(BCDC) staff. The Port would enter into 10- 
year leases for office space in the shed and 
lease the bulkhead buildings for retail and 
restaurant use. Modeled after Pier 9, tenants 
would be responsible for tenant 
improvements. 

Pier 33 North 2,000,000 

Make improvements to the second floor of Pier 33 
North to allow leasing of currently unusable 
space. 

Pier 50 Entryway 10,000,000 

Repairs to the driveway access to the Port's Pier 
50 Maintenance Facility to continue the use of 
Pier 50 for Port and tenant activities. 

Backlands Improvements 8,000,000 

& Seawall Repair 

Infrastructure improvements to the Port's 
Backlands area to expand the Port's Eco-lndustrial 
Park and other leasing activity at the site. 

Financing Costs 6.000.000 

Total $66,000,000 

Public Necessity 

Port staff developed this list of Projects through an inter-divisional planning effort 
focusing on identifying projects that would (1) most benefit the Port financially by 
transforming under-utilized Port assets into performing assets, (2) meet the Port's 
maritime and public access missions, and (3) ensure the safety of Port employees. All 
of the Projects listed above meet at least one of those criteria. The Cruise Terminal at 
Pier 27 meets two of the criteria by increasing the Port's annual revenues through the 
proposed restaurant and special event uses of the facility while meeting the Port's 
maritime and public access missions by providing a cruise terminal and public plaza. 
The Pier 50 Entryway project will ensure the safety of the Port's maintenance 
employees but will most likely not increase the Port's annual revenues. Port staff 
estimate that once all of the projects are complete the Port's annual revenues should 
increase by approximately $6 million as the result of new leasing activity while adding 
877 permanent jobs to San Francisco's economy and $1 million in new annual General 
Fund tax revenues to the City's budget. All of the above noted benefits of the proposed 
projects to be funded with a Port revenue bond and the lack of alternative funding 
sources constitute the public necessity of the Port's revenue bond. 

The Port's recently adopted 10-year Capital Plan identified the Projects and their 
funding source; however. Port staff did not specifically request Port Commission 

-3- 



approval of the Projects when the Capital Plan was adopted by the Port Commission. 
Port staff made an informational presentation on the proposed list of Projects at the May 
12, 2009 Port Commission meeting. Mayor Gavin Newsom supports funding these 
projects with the Port's revenue bond funds. It is important to note that selecting these 
projects to be funded with a Port revenue bond means that the Port will not be funding 
other potential Port projects itemized in the Port's 10 Year Capital Plan until other 
funding can be identified. 

The federal stimulus package provides an incentive to act quickly since it eliminated 
Alternative Minimum Tax ("AMT") penalties associated with the type of debt the Port 
and Airport issue if such debt is issued during the next two years, 2009 and 2010^. 
Eliminating the AMT has the corresponding effect of reducing the interest rate on the 
Bonds, thereby reducing the Port's interest expense. In short, this is an ideal time for 
the Port to issue revenue bonds and begin construction projects that help the Port 
continue repairing and upgrading the City's waterfront while acting as an economic 
stimulus during the current recession. 

Revenue Bond Structure, Repayment Program, and Financing Team 

At this time, we expect to issue 30 year revenue bonds with a fixed interest rate through 
a negotiated sale to retail and institutional buyers. As previously noted, we are 
expecting a 6% interest rate assuming the Port will receive an "A" rating on its bonds or 
the same rating the Port has received when it refunded its revenue bonds in 2004. The 
Port's Financial Advisors are Bob Gamble from Public Financial Management (PFM) 
and Vince McCarley from Backstrom, McCarley, Berry and Co. The Port's Bond 
Counsel is Sean Tierney from Hawkins Delafield and Co-Counsel is Bill Lofton with 
Lofton and Jennings. We have issued a Request for Proposal (RFP) to the City's pool of 
bond underwriters from which we expect to award a contract by the end of July 2009. 
We'll inform the Port Commission of the selected bond underwriters at a future Port 
Commission meeting. 

Anticipated Port Revenue Bond Issuances 

At this time, we expect to issue Port revenue bonds later this fall to fund design costs 
associated with the Cruise Terminal and Piers 19 or 23 projects and construction of the 
Pier 50 Entryway, Backlands, and Pier 33 projects. We anticipate issuing the balance of 
revenue bonds to fund construction of Piers 19 or 23 and the Cruise Terminal projects 
in FYs 2010-11 or 201 1-12 depending on the outcome of the CEQA, design, and 
permitting processes for these projects. Port staff will return to the Port Commission at a 
fall 2009 Commission meeting requesting authorization to issue and appropriate 
revenue bond funds as well as approve the required documents to execute the sale of 
revenue bonds such as the Preliminary Official Statement, the Continuing Disclosure 
Certificate, the Indenture of Trust, the Escrow Agreement, and the Bond Purchase 
Agreement. 



^ Port and airport facilities usually include a certain amount of private sector activities such as retail and restaurants. 
Thus, the IRS normally does not allow interest earned on such port or airport bonds to be tax free to the investor. As 
a result, port and airport bonds, while still municipal bonds, are considered quasi-taxable debt through the 
application of the AMT on the investor's bond income. Investors in such bonds have to be compensated by charging 
issuers higher interest rates thereby increasing port and airport interest expense relative to true tax exempt bonds. 

-4- 



Conclusion 

In summary, the Port is preparing to issue up to a total of $66 million in revenue bonds 
starting in the fall of 2009 for which Port staff wish to fund several projects totaling $60 
million that will repair and upgrade five of the Port's facilities and areas. Most of those 
projects will result in improved revenues to the Port through new leasing activity as well 
as meet the Port's maritime and public access missions. As such, Port staff request 
approval to fund the following projects with Port revenue bond funds: Cruise Terminal at 
Pier 27, Piers 19 or 23, Pier 33 North, Pier 50 Entryway, and the Backlands 
Improvements and Seawall Repairs. 



Prepared by: Tina Olson, Deputy Director 
Finance and Administration 






PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 09-39 



WHEREAS, 



WHEREAS, 



WHEREAS, 
WHEREAS, 

WHEREAS, 
WHEREAS, 



WHEREAS, 



WHEREAS, 



WHEREAS, 



Section 9. 1 1 2 of Article IX of the City and County of San 
Francisco's Charter entitled "Revenue Bonds of the Port 
Commission" gives the Port Commission exclusive power to 
perform or accomplish issuance of revenue bonds for Port-related 
purposes; and 

Assuming $10 million in net Port revenues, a 6% interest rate, and 
1 .30 debt service coverage requirement, the Port's fully-leveraged 
debt capacity is $106.4 million of which $95 million would be 
available to fund project costs; and 

A $106.4 million revenue bond requires the Port to budget $7.7 
million for annual debt service payments; and 

The Port's FY 2009-10 budget includes $4.7 million for annual debt 
service payments that will support a $66 million revenue bond of 
which $60 million would be available to fund project costs; and 

On July 1 , 2009 the Port of San Francisco retired its existing 
revenue bond debt; and 

The Port Commission wishes to issue new Port revenue bonds to 
fund projects that will financially benefit the Port of San Francisco, 
meet the Port's Maritime and Public Access missions and ensure 
the safety of Port employees; and 

The following Port projects (collectively, the "Projects") will 
financially benefit the Port, meet the Port's Maritime and Public 
Access missions, and/or ensure the safety of Port employees: 
Cruise Terminal at Pier 27, Piers 19 or 23, Pier 33 North, Pier 50 
Entryway, and the Backlands Improvements and Seawall Repairs 
all of which constitute the public necessity for issuing Port revenue 
bonds; and 

The Port Commission has determined that it would be inefficient to 
fund these Projects through annual allocations in the Port's capital 
budget; and 

The Port Commission has not identified another source of funds for 
these Projects; now, therefore, be it 



RESOLVED, The Port Commission approves the use of Port revenue bonds to 

fund the Cruise Terminal at Pier 27, Piers 19 or 23, Pier 33 North, 
Pier 50 Entryway, and the Backlands Improvements and Seawall 
Repairs projects; and, be it further 

RESOLVED, The Port Commission adopts this resolution solely for the purpose 

of approving the Projects through the issuance of Port revenue 
bonds. This Resolution does not bind the Port Commission to 
make any expenditure, incur any indebtedness or proceed with the 
Projects. 



/ hereby certify that the foregoing resolution was adopted by the Port 
Commission at its meeting of July 14, 2009. 



Secretary 




PORT° 



OF 
SAN FRANCISCO 



MEMORANDUM 



TO: 



FROM: 



July 9, 2009 

MEMBERS, PORT COMMISSION 
Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Kimberly Brandon 
Hon. Michael Hardeman 
Hon. Ann Lazarus 



Monique Moyer 
Executive Directo 




SUBJECT: Request approval of a Reimbursement Resolution Related to Proposed 
Port Revenue Bond Issuance 

DIRECTOR'S RECOMMENDATION: Approve the Attached Resolution 



Background and Discussion 

As discussed in more detail in Item 10A on the July 14, 2009 Port Commission agenda, 
the Port is preparing to issue up to $66 million of Port revenue bonds starting in the fall 
of 2009 to fund various phases of several Port capital projects. Section 1 .150-2 of the 
Treasury Regulations requires the Port to have a resolution adopted by the Port 
Commission and the Board of Supervisors which allows the Port to use bond proceeds 
for reimbursement purposes. Specifically, the proposed resolution allows the Port to use 
bond proceeds to reimburse expenses associated with the Port's bond-funded projects 
incurred in the future or within 60 days prior to the date of the adopted resolution. The 
proposed resolution does not bind the Port Commission or the Board of Supervisors to 
actually issue bonds or other form of debt financing. 

At this time. Port staff expect to reimburse costs related to the bond issuance itself such 
as those associated with the Financial Advisor, Bond Underwriters, and Bond Counsel 
services as well as Trustee and Rating Agency fees. We also expect to reimburse costs 
associated with the California Environmental Quality Act (CEQA) fees and related 
services provided by the City's Department of City Planning for the revenue bond 
funded projects. 

This Print Covers Calendar Item No. 9C 



i 



F SAN FRANCISCO 



DRESS Pier 1 



FAX 415 274 0528 



mm 



Port staff may also reimburse expenses associated with the planning and design phase 
of the Cruise Terminal project. Port staff will seek an appropriation of bond proceeds 
when it requests authorization to issue the bonds in the fall that will identify which costs 
to reimburse with the bond proceeds. 

Conclusion 

In short, Section 1.150-2 of the Treasury Regulations requires the Port to have a 
resolution adopted by the Port Commission and the Board of Supervisors allowing for 
the use of bond proceeds to reimburse eligible issuance and project costs incurred prior 
to issuing bonds. Such resolution does not bind the Port Commission or the Board of 
Supervisors to issue any bonds or other form of debt financing. Assuming the Port 
Commission adopts the proposed resolution, Port staff will subsequently submit a 
similar resolution to the Board of Supervisors for review and approval. 



Prepared by: Tina Olson, Deputy Director 
Finance and Administration 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 09-40 



WHEREAS, The Port Commission desires to pay for the construction and 
reconstruction of certain improvements to various Port of San 
Francisco projects, and all other works, property, and structures 
necessary or convenient for the foregoing purposes ("the Projects"); 
and 



WHEREAS, The Port expects to pay sixty (60) days prior to the date hereof and on 
and after the date hereof certain costs incurred in connection with the 
Projects; and 

WHEREAS, The Port Commission intends to issue Port revenue supported bonds 
to finance the costs of the Projects; and 

WHEREAS, The Port Commission hereby determines that the moneys advanced 
and to be advanced to pay certain expenditures are or will be available 
only for a temporary period and it is necessary to reimburse all such 
expenditures made within 60 days prior to or on and after the date 
hereof with respect to the Projects from the proceeds of one or more 
issuances of Port revenue supported bonds (the "Bonds"); and 

WHEREAS, Section 1 . 1 50-2 of the Treasury Regulations requires the Port 

Commission to declare its reasonable official intent to reimburse prior 
expenditures for the Projects with proceeds of a borrowing; now, 
therefore, be it 

RESOLVED, by the San Francisco Port Commission as follows: 

Section 1.The Port Commission hereby finds and determines that the 
foregoing recitals are true and correct. 

Section 2. This Resolution is adopted by the Port Commission solely for 
purposes of establishing compliance with the requirements of Section 
1 .150-2 of the Treasury Regulations. This Resolution does not bind 
the Port Commission to make any expenditure, incur any indebtedness 
or proceed with the Projects. 

Section 3. The Port Commission hereby declares its official intent under 
Treasury Regulations Section 1.150-2 and declares its intent to use 
proceeds of indebtedness to reimburse all expenditures incurred in the 
future, or within 60 days prior to the date hereof, in connection with the 
Projects. The Port Commission hereby further declares its intent to 
use such proceeds to reimburse the Port of San Francisco as the case 



may be, for actual expenditures made by the Port of San Francisco on 
the Projects. 

Section 4. Each expenditure was and will be either (a) of a type 
properly chargeable to a capital account under general federal income 
tax principles (determined in each case as of the date of the 
expenditure), (b) a cost of issuance with respect to the Bonds, (c) a 
nonrecurring item that is not customarily payable from current 
revenues, or (d) a grant to a party that is not related to or an agent of 
the Port of San Francisco so long as such grant does not impose an 
obligation or condition (directly or indirectly) to repay any amount to or 
for the benefit of the Port of San Francisco. 

Section 5. The maximum principal amount of debt expected to be 
incurred for the Projects is $66 million. 

Section 6. All actions heretofore taken by any appropriate official or 
employee of the Port of San Francisco with respect to the Projects are 
hereby approved, confirmed and ratified. 



/ hereby certify that the foregoing resolution was adopted by the Port 
Commission at its meeting of July 14, 2009. 



Secretary 



SAN FRANCISCO 
PORT COMMISSION 



5 JULY 14, 2009 

^/ ^ MINUTES OF THE MEETING 

GOVERNMENT 
DOCUMENTS DEPT 

AUG -6 2009 

SAN FRANCISCO 
PUBLIC LIBRARY 

MEMBERS, PORT COMMISSION 

HON. RODNEY FONG, PRESIDENT 

HON. STEPHANIE SHAKOFSKY, VICE PRESIDENT 

HON. MICHAEL HARDEMAN 

HON. ANN LAZARUS 



MONIQUE MOYER, EXECUTIVE DIRECTOR 
AMY QUESADA, COMMISSION SECRETARY 



CITY & COUNTY OF SAN FRANCISCO 
PORT COMMISSION 

MINUTES OF THE MEETING 
JULY 14, 2009 

1 . CALL TO ORDER / ROLL CALL 

Commission President Rodney Fong called the meeting to order at 2:03 p.m. The 
following Commissioners were present: Rodney Fong, Michael Hardeman and 
Ann Lazarus. Commissioner Stephanie Shakofsky was not present. 

2. APPROVAL OF MINUTES - June 9, 2009 

ACTION: Commissioner Lazarus moved approval; Commissioner Hardeman 
seconded the motion. All of the Commissioners were in favor; the minutes of the 
June 9, 2009 were adopted. 

3. PUBLIC COMMENT ON EXECUTIVE SESSION 

4. EXECUTIVE SESSION 

A. Vote on whether to hold closed session to confer with Legal Counsel and 
Real Property Negotiator. 

ACTION: Commissioner Lazarus moved approval; Commissioner Hardeman 
seconded the motion. All of the Commissioners were in favor. 

At 2:04 p.m., the Port Commission withdrew to executive session to discuss 
the following: 

(1) CONFERENCE WITH LEGAL COUNSEL REGARDING EXISTING 
LITIGATION MATTERS: 

a. Discuss existing litigation matters pursuant to California Government 
Code Section 54956.9 and San Francisco Administrative Code 
Section 67.10(d) (3 cases; Information and Action Items): 



• 



M07 142009 



In re Pier 38 Maritime Recreation Center. Inc. (Debtor) . U.S. 
Bankruptcy Court, Northern District of California, San Francisco 
Division, Chapter 1 1 (Case No. 07-31444 DM 1 1), and Pier 38 
Maritime Recreation Center. Inc. and Carl Ernst Jr. v. Citv and 
Countv of San Francisco: Port Commission of San Francisco 
(Adversary Proceeding No. 07-31443). 



-1- 



• City and County of San Francisco v. Carl Ernst. Jr.. and Pier 38 
Maritime Recreation Center. Inc.: San Francisco Superior Court 
(Case No. CUD-07-621476) 

(2) CONFERENCE WITH REAL PROPERTY NEGOTIATOR - This is 
specifically authorized under California Government Code Section 
54956.8. This session is closed to any non-Citv/Port 
representative.* 

a. Property : Pier 15/17 (Embarcadero at Green Street) 

Person Negotiating : Port: Byron Rhett, Deputy Director, Planning and 

Development 

*The Exploratorium: Dennis Bartels 

At 3:15 p.m., the Commission withdrew from executive session and reconvened in 
open session. 

ACTION: Commissioner Lazarus made a motion to adjourn executive session and 
reconvene in open session; Commissioner Hardeman seconded the motion. All of 
the Commissioners were in favor. 

ACTION: Commissioner Lazarus made a motion to not disclose any information 
discussed in executive session; Commissioner Hardeman seconded the motion. 
All of the Commissioners were in favor. 



5. ANNOUNCEMENT OF PROHIBITION OF SOUND PRODUCING DEVICES 
DURING THE MEETING 

The Commission Secretary announced that the ringing of and use of cell phones, 
pagers, and similar sound-producing electronic devices are prohibited at this 
meeting. Please be advised that the Chair may order the removal from the 
meeting room of any person(s) responsible for the ringing or use of a cell phone, 
pager, or other similar sound-producing electronic device. 

6. EXECUTIVE 

A. Executive Director's Report : Executive Director Monique Moyer reported the 
following: 



• 



M07 142009 



Installation of Commissioner Rodney Fong as Chair of the San Francisco 
Convention & Visitors Bureau - July 7. 2009 

President Rodney Fong has been officially installed as the Chair of the 
San Francisco Convention and Visitors Bureau. He is following a long line- 
up of people who have been fantastic to the Port. He is picking up where 
our friend Pat Gallagher left off. The installation luncheon in which they 



-2- 



• 



M071 42009 



both spoke to about a thousand people was a fantastic day for the Port. 
The Port was mentioned so many times. It was gratifying. Commissioner 
Fong has been a member of the Board of Directors of the Convention and 
Visitors Bureau since 2000 and on the executive committee until 2007. 
Between Commissioner Fong and outgoing President Pat Gallagher, 
they've cited many projects central to the future of San Francisco. The 
cruise terminal at Pier 27 came up repeatedly. The Exploratorium came up 
repeatedly, the development of Parking Lot A and other projects. It was a 
very impressive presentation and many of the photos were displayed for 
all. She congratulated Commissioner Rodney Fong and she hopes that 
brings us great things as it has under Pat's leadership and before him, 
Herb Myers, and before him, Susie McCormick. 

San Francisco Convention and Visitors Bureau's 2009 Silver Cable Car 
Award Winner - Fisherman's Wharf 

The Fisherman's Wharf was recognized by the San Francisco Convention 
and Visitors Bureau with their prestigious Silver Cable Car Award. The 
award goes to an individual or organization that has made a significant 
contribution to San Francisco. The award was presented by District 
Supervisor and President David Chiu and it was accepted by many of the 
Port's tenants, in particular Trevar Booker of Alioto's and Kevin Carroll of 
the Community Benefit District. It was the ninety-ninth year of the 
Convention and Visitors Bureau's annual luncheon. Commissioner Fong 
will preside over the hundredth year. 

Other awardees of the Silver Cable Car in the past have included Herb 
Cain, Willie Mays and Steve Silver of Beach Blanket Babylon. It's a very 
high honor and it's wonderful to have renewed interest in Fisherman's 
Wharf. 

San Francisco Giants Countv Fair- July 9 to 19. 2009 

The SF Giants kicked off their inaugural county fair in the northeast corner 
of Parking Lot A. It looks fantastic when it's lit up at night. It will run from 
July 9 through July 19. There are 20 carnival rides and the Giants baseball 
zone. They're expecting about 1000 to 3000 patrons daily. They have live 
music, and they'll be closing the show on Saturday night, July 18, with 
Kenny Chesney, the Academy of Country Music's Entertainer of the Year. 
She gave kudos to the Giants executives for securing such a great venue. 
She hopes to see the fair over and over again, and looks forward to great 
success there. 

San Francisco Bay Conservation and Development Commission's Rising 
Tides Competition Exhibit at Ferry Building - July 9 to 19. 2009 

Today the San Francisco Bay Conservation and Development 
Commission announced the winner of their Rising Tides competition. The 

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130 entries to combat rising tides in the San Francisco Bay are on display 
to the left of the Port Commission hearing room. Some of them are 
amazing. One of her favorites, for various reasons, is the Golden Lock, 
which would actually be built under the Golden Gate Bridge and prevent 
water from coming in, a very novel idea. 

There were 130 entries from 18 different countries, including an entry from 
the Port's Engineering division, Kim von Blon and Steven Reel. The Port 
was a sponsor of this event, together with NOAA, Equity Office Partners, 
the San Francisco AIA, and BPS Reprographics. 

Today, BCDC had anticipated announcing only one winner but announced 
six winners instead. The winner was supposed to get $10,000 but the 
entries were so compelling. They felt that the six entries that were chosen 
went together in more of a programmatic response so they ended up 
awarding six. Five of the award winners are either working or living in San 
Francisco Bay. She encouraged everyone to do a quick loop because 
some of the ideas are just incredible to think about. 

Mexican Tall Ship Cuauhtemoc - Julv 13 to 17. 2009 at Pier 27 

Today, we are honored to welcome the Mexican tall ship Cuauhtemoc. 
She sailed in yesterday with approximately 220 Navy officials on board. 
They had all the Navy officers climb the masts and were spread out 
across the masts. It was incredible to see. 

The ship is a Navy vessel. She's coming in from Asia into San Francisco, 
and then home to Acapulco. She's been sailing since the beginning of 
February. While it's a naval ship, they do try to sail under natural sail 
instead of engineered power, so it's taken them 34 days to cross the 
Pacific. The purpose of their visit here is to represent the people of Mexico 
and to bring a message of peace. 

The ship is open to the public and it's free. There is a tremendous crowd 
out there already checking her out. She's absolutely gorgeous, made 
entirely of wood and obviously very well cared for. She encouraged 
everyone to see her while she's here through July 18th. 

Ferry Plaza Farmer's Market Introduces New Thursday Market 

There was a fantastic turnout for the farmer's market today, partially due to 
the weather and partially due to all the great things happening on the 
waterfront. Starting at the beginning of July, the farmers market began 
operating a Thursday market with new street vendors and an exciting 
selection of peak-season farm stands. 



M071 42009 



Commendation for Bill Schiavo. Electrical Supervisor, on his retirement 

One of our stalwarts, one of our miracle workers, Bill Schiavo is retiring 
after nine and a half years as the head of our electric shop. Since the time 
that she's been at the Port, we've come to rely on Bill for repair projects or 
budgetary requests. We've often tried to allude to or explain the 
complexity of the electrical and other systems here at the Port. Bill's 
responsibility is no easy task. Over the years, he has done fantastic work 
for the Port, including working on installing the customs and border 
protection radiation portal monitors at Pier 80. He helped us run 
emergency backup power to Pier 1 , so that in the event of an emergency, 
we have generated power. He's helped us with security lighting on 20th 
Street to protect the Pier 70 assets. 

Most importantly, when we were looking to welcome the Queen Mary II 
and reopen Pier 27 as a cruise ship terminal, he got that miracle of a place 
running again. We've been blessed to have that operation going ever 
since and that's where the Mexican tall ship Cuauhtemoc is berthed 
today. Those are sort of his physical accomplishments, but we're going to 
hear in a few minutes what a tremendous person Bill himself is. 

When she joined the Port, she had the opportunity to visit him in his shop, 
and he had some advice for her. He presented it in such a nice way that 
she actually listened. She has not forgotten it. She probably has not lived 
up to it, but she's always appreciated his honesty and his gentle touch. 
She could call on him for any matter, as she can with almost everyone in 
the maintenance division. That means so much to her personally. She's 
sorry to see him go, but happy for him. 

Commissioner Rodney Fong indicated that Bill has great friends at the 
Port and thanked him for keeping the lights on at the Port of San 
Francisco. For the record, Commissioner Fong read the inscription on the 
plaque which states, "William 'Bill' Schiavo, thank you for nine-and-a-half 
years of outstanding service. February 28, 2000 to July 17, 2009. From 
the Port of San Francisco." and presented him the plaque. 

Tom Meisenbach, Maintenance Superintendent, indicated that he's been 
fortunate to work with Bill during his nine-and-a-half years at the Port. 
They have worked very closely together on a lot of projects, and it's been 
his privilege to have known him and worked with him. He thanked him for 
his dedication, his institutional knowledge, his wit and his sense of humor. 
He will be sorely missed here at the Port. He will miss the daily meetings 
which were quite colorful at times but they were a lot of fun. He 
appreciates all the support that he's given him over the years, and he's 
very proud to be able to call him his friend. He will be missed, and on 
behalf of everybody at the Port, he wished him all the best. 



M071 42009 



M07 142009 



Lavena Holmes-Williams, HR Manager, wished Bill only the best in his 
retirement. Bill's been with the city approximately 1 1 years. He started at 
the PUC and he could not have worked in two more picturesque places, 
up in the Sierra Nevada foothills, and down here at the port. He's worked 
in two really good spots. She congratulated him on picking some really 
nice places to work. Bill has had the unique opportunity to do electrical 
work, under piers and skiffs and at heights, in high winds and rain. We 
appreciate his hard work and dedication, and everything that he and his 
crew have done for the port. She wished him the best and hoped that he'll 
come back to see us. 

Mabal Bhat, senior electrical engineer, thanked Bill for all the help that he 
had given. The engineering division calls upon him when they need 
something all the time. Bill has been very knowledgeable and very helpful. 
He appreciates his support for the last 10 years as an electrician and 
electrical supervisor. He wished him all the best in his post-9-to-5 life. 

George Onyemem, business services manager, added his best wishes to 
Bill on his retirement. Over the nine-and-a-half years that he's been a 
supervisor at the Port, he's had to make numerous requests of him to fix 
something at the Ferry Building or Pier One. Whether it's to change the 
clocks for Daylight Savings Time or to build a new fixture for somebody's 
workstation, he's always had good experiences with Bill. Bill is as 
deliberate as an electrician ought to be. He talks slowly and deliberately, 
making sure you connect with every word he says. He will be missed. 

Pilar Schiavo, Bill's daughter, indicated that it's funny that George just said 
that Bill talks slowly, because when she was growing up, she remembers 
going into the living room and asking her dad if she could go do 
something, and then she'd leave and give him some time to think. Then 
she'd come back, get the answer a few minutes later, and have to 
patiently wait while he got the whole thing out... 
She's kind of representing the family today and the Port's loss is her 
family's gain. They're really happy that he's able to be at this point where 
he can take time and like it should be, to be with his family and to take the 
time for the things that are really important in his life. She actually went on 
a job with him when she was young. He was putting in some lights in the 
local public library in Sonora. From that moment forward, she had a 
profound respect for the work that he did. She knows it's very hard work 
and he's worked very hard to provide for his family for a long time. When 
he came to the city, it was really exciting that it was a job where he 
actually had sick days and vacation days, and they could take vacations. 
He's also provided for the city in a big way and returned what he's gotten 
from this position. He's going to be sorely missed here, but they're happy 
to have him. 

Bill Schiavo concurred with Pilar's comments. It's been great to work at the 
Port. It's a great place to work. He's really enjoyed it and also enjoyed all 

-6- 



• 



the people he's worked with on a daily basis such as Lavena, Lynette 
Lum, Belen Afable, Helen Chan and everybody at Pier 50. There's not a 
more cohesive, skilled group anywhere else. They can literally make 
something from nothing. You could start with raw materials and they'll 
build anything you need, and there are lots of things on the port property 
that is so old that you can never go out and buy one nowadays. It's 
amazing that they do it every day and they're so competent at it. He will 
miss the family spirit that's there. They will help you achieve your goals. 
The port has given him a lot, but it's much richer than just a retirement 
check. It's all these friends. He loves his boss and tells him so all the time 
and the feeling of trust, confidence that they share back and forth as well 
as with the other supervisors. It's really been an honor to work here and 
he thanked everybody for allowing him to do that and putting up with him 
every now and then as he can be cantankerous on occasion. He has 
enjoyed working at the Port, and it's a memory he'll keep forever. 

Commendation for Patrick J. Gallagher, former President of Giants 
Enterprises 

Ms. Moyer indicated that we have another goodbye today, probably 
someone who is a little less known to most people in this room but seems 
to have millions of friends all over the world. From what she could gather 
in the last couple days, Pat Gallagher has the distinction of being the 
longest-running employee of the San Francisco Giants, at 33 years. Pat 
was discovered at Marine World and hired by the Giants' Bob Lurie in 
believe 1976. 

Jack is wearing jeans today because Jack does not have to be the face of 
the Giants today while he's at the Port, which is usually the job that Pat 
gets him to do. She figured out last night that Pat is far more brilliant and 
he has this aura of modesty, but it's actually very, very savvy. 

Pat has done some amazing things, and those of you who are long-term 
Giants fans will recognize so many of the fantastic ideas he came up with. 
Those of us at the Port have struggled hard to try to market the port ~ 
what are we, what's our product, who are we, what are our boundaries ~ 
but we've never had to market Candlestick and for that she's always 
eternally grateful. 

Despite the crazy ideas about public trust exchanges in the Candlestick 
area, we've held firm so far, and Pat had that job forever and came up 
with some really great things. Some of you may recall that if you were 
brave enough to stay extra innings during the week, you got a button 
known as the Croix De Candlestick. You may remember the Crazy Crab 
or the Doofus Dome or the Great Wallenda, who tightroped across 
Candlestick Park in 1977. 



M071 42009 



M07142009 



Then we moved forward to the new ballpark here at the Port, one of our 
crown jewels in our portfolio, then known as Pacific Bell Park. It turned 
out that while, once again. Jack Bair was the one here in front of the Port 
with his pal Larry, Pat was the one out selling air, as we learned last 
night, because Pat was selling something that wasn't an Oakland Raiders 
private seat license or personal seat license, but actually was something 
else that maybe would, maybe wouldn't exist. 

John Yee was out convincing I believe CalSTRS and other worthwhile 
investors to buy into Pat's notion that he could somehow repay this 
magnificent debt with seat licenses to nothing but a beautiful view of the 
Port. She hopes that he'll come back and sell the Port's bonds when we 
reissue them in a couple of months, because he obviously can sell them 
to anybody. 

Since Pac-Bell Park, now AT&T Park, opened, Pat has brought us the 
Dave Matthews Band, the Rolling Stones, Bruce Springsteen, Green 
Day, Cirque du Soleil, the renowned, fantastic, everybody-must-attend 
Emerald Bowl, and Opera in the Park, among many other things. Pat has 
just concluded a great service to the city in his time on the executive 
board of the Convention and Visitors Bureau, culminating with his 
presidency. 

Pat is a man after her own heart. He totally gets the macroeconomic 
concept of leveraging and she just digs that about him. She and Pat both 
understand that leveraging isn't just a singular monetary kind of thing. It's 
a summation of the financial mixed with the interpersonal, and in Pat's 
case, mixed with a whole lot of daring and chutzpah. She suspects that 
like her, because she's Irish, he has a quiet devotion to Lady Luck and 
good karma, and is a big believer that luck plays a good part of it. 

He is a person who's consistent, credible, and compassionate. He is just 
a quiet champion, which is why we've never seen him here before. He 
has quietly and subtly promoted the city, the Giants, and the Port in ways 
that we probably don't even know through his vast network. We have 
benefited greatly. We will soon find out, in his absence, exactly what he 
did for us. 

We are sorry to see Pat go. She already has lots of volunteer 
assignments for him. Pat is such a great guy, he has his own bobblehead 
now although the bobblehead's looking a little younger. On behalf of all of 
us at the Port, she thanked him for his contributions, that fantastic legacy 
that's just down the street from us, and for his love and compassion and 
commitment to not just the City but the Port. 

Commissioner Fong indicated that Pat is a cool guy. He's got a Facebook 
page and he wrote on his Facebook page this morning that he 
appreciates his gentleness and ability to put people before him. In his 

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M071 42009 



speech last night, he did nothing but thank everybody else who he 
credited his success before acknowledging himself. They've worked 
together on many different levels. His father worked with both Gallagher 
brothers when they were at Marine World, and obviously through the 
Convention and Visitors Bureau, and now here with the Port, as being the 
largest tenant to the Port. 

After reading the inscription on the plaque: "With gratitude and friendship, 
Patrick J. Gallagher, Port of San Francisco, June 2009," Commissioner 
Fong presented him the plaque. 

Susie McCormick indicated that she's known Pat Gallagher for some 
time. She did not know him through the Giants, but once she found out 
he was with the Giants, she used him a lot. Pat was the past chairman of 
the Convention and Visitors Bureau, and just had their ninety-ninth 
annual lunch. She thinks that Pat has been to every one of the lunches. 
That's where she got to know Pat, and there are a lot of them who are 
here with him from the Bureau, because he was an invaluable asset to 
the Bureau. He helped them have a good time, he helped them realize 
that there's a lot more to life than just coming in and sitting down for a 
meeting. Pat deserves all the tributes that he's gotten, and she'd like to 
be the first one to say, "Bye-bye for now." 

Jack Bair indicated that on behalf of the Giants, Johnny and Sarah Hunt 
are two of the Giants staff that worked with the Port, and thought it would 
be good if they all came up here to recognize their colleague, Pat. He 
wanted to thank the Port Commission, Rodney and the Port staff for 
recognizing Pat today. Pat is synonymous with the Giants for the last 33 
years. It's hard to imagine life without him. Today is a baseball holiday of 
sorts, hence the jeans and casual wear. The staff went to the County Fair 
at lunch but in Saint Louis, there's the All-Star Game today. For many of 
them, their all-star is here at the Port Commission today, Pat Gallagher. 
He has had a remarkable career, and he's made lasting contributions to 
the Port and to the City. He has truly had fun along the way, as Monique 
mentioned, coming up with some of the most inventive promotions in the 
game, from the crazy crab, the anti-mascot, to the Great Wallenda, 
walking a tightrope between the foul poles at the notoriously windy 
Candlestick after Pat served him a martini. He truly had the courage to try 
anything. 

Pat also helped secure the sponsorship revenue necessary to build the 
first privately financed ballpark in the modern era. We will all enjoy his 
legacy for many years to come. Most importantly, he's also been a great 
mentor and source of strength. They will miss Pat but pledge to carry on 
with his inspired example. On behalf of his colleagues at the Giants, they 
wished him the very best. 



-9- 



M07 142009 



John Yee indicated that Pat is a friend and a colleague. They've heard a 
lot of tributes, and as he listened to them for the last month and for the 
coming month, what's remarkable to him is that it's all true. He's tried to 
puncture through it to see what's been invented, and none has been 
invented. That's the best tribute that Pat can have. 

Ron Kovas, chairman of the board of the Emerald Bowl, appreciates the 
opportunity to say a few words about Pat. For those who attended the 
event last night or read the feature article story this morning in the 
Chronicle, Pat Gallagher is a man of many ideas. John Marks last 
evening touched on one of those ideas, which he's become part of, that's 
called the Emerald Bowl. It was an idea that Pat had almost 10 years ago 
about bringing a bowl game to San Francisco. Today we look back on 
that idea and it's brought well over $100 million in economic benefit to the 
City of San Francisco - almost $85 million direct benefit to such places 
as hotels, restaurants, limousine drivers, tour operators, printers, 
advertising agencies, cab drivers, vendors, and at least that amount of 
money in terms of exposure to San Francisco. So it's on primetime 
television, three hours every year. This last year, it was the fifth most 
highly viewed bowl game of all bowl games on television. So for three 
hours it was a commercial about San Francisco. Most importantly, as Pat 
said, his job is always to put butts in seats. In the two of the last three 
years, the Emerald Bowl was a sellout. The year it wasn't a sellout, it 
almost was a sellout. He knows that the Giants have recouped their 
investment many times over from that original idea that Pat had. As Pat 
enters the next chapter of his professional life, there are a few more ideas 
rolling around in his head. He thanked him for the idea he had 10 years 
ago. 

Joe D'Alessandro, president and CEO of the San Francisco Convention 
and Visitor Bureau, indicated that Pat Gallagher is a very rare person. He 
is somebody that really has given himself not only to the Giants but to this 
community. We've heard a lot of the contributions, from everything he did 
at Candlestick Park, to being the first sports marketer of any major- 
league baseball team in the country, to his spearheading the efforts to 
build AT&T Park, which is the finest ballpark in the world, and an icon and 
a treasure of San Francisco. Beyond the physical things, the events and 
activities, from the Emerald Bowl to some of the events at AT&T Park to 
the Convention and Visitors Bureau, he just volunteered his time. He 
gave his time for something that didn't necessarily personally benefit him, 
but benefited the entire community. The community is grateful and 
indebted to Pat because of that. San Francisco is a better community 
because of the efforts of Pat Gallagher. He's one of the most authentic, 
real, genuine people that he knows. It's been a pleasure to get to know 
him and he looks forward to his involvement in our community long into 
the future. His 33 years at the Giants are over, but his involvement in San 
Francisco is not. He looks forward to his leadership. He was instrumental 
in the passage of the Tourism Improvement District, which will enable 

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M071 42009 



San Francisco's economy to continue to strengthen in the future, and he's 
going to have his hand and his fingerprints on many more activities and 
events, and things in San Francisco that make this a better place to live 
and a better place to visit. He feels privileged to get to know and to know 
him. He looks forward to continued friendship and his continued 
involvement in our community long into the future. 

Joyce Gardella, marketing director for the Exploratorium, first heard the 
name Pat Gallagher in her first job, which was a while ago in Chicago 
and Brookfield Zoo, when Pat and Mike were still at Marine World. She 
called them for advice on dolphins that they were getting, for the first 
time, an inland dolphin area in the country. They gave it to her. She 
remembered a lot of encouragement from Pat. She remembered being 
impressed with what he saw as the possibilities. So her career went on. 
She stayed in Chicago for a while. People knew Pat's name at the ball 
clubs that she worked with when she was at the zoo. Then she moved on 
to Boston, and they knew Pat's name there, too. Then she came to San 
Francisco and there he was. As a relative newcomer and as one of the 
staff of the Exploratorium as they're working on this exciting project, she 
appreciates Pat's encouragement, what he's done for this city. She 
presented him a lifetime membership at the Exploratorium, which they 
hope that he will use to come visit them when they become a Giants 
neighbor on the waterfront. 

John Handlery indicated that he's known Mr. Gallagher since his early 
days at the park, and then creating City Pass was just fabulous. He can't 
thank him enough for everything he's done. Pat also has a brother, whom 
he had the pleasure of working with at the Bureau. When he found out 
that Pat is moving on to his next chapter in life, he was disappointed 
because Pat's one of the few people that he's had the great pleasure of 
dealing with and working with who will honestly tell you where he's 
coming from. It's not personalities, it's straightforwardness, it's open 
dialogue. He also will tell you when to shut up, as he often did. It's that 
kind of breath of fresh, honest approach, and that's not replaceable, and 
that's something he will take away from years of working with Pat: that 
frankness and that commitment to get to where we need to go. As Joe 
mentioned earlier about the Tourism Improvement District (TID), there 
were a lot of bumps, but Pat stayed focused. Despite everyone's different 
opinions, including his, he brought all of them back around and kept them 
on track to what they were trying to accomplish. In his opinion, the TID 
would not have been done if it hadn't been for what Pat did, and for that 
he's very thankful. Hopefully he'll have the opportunity to continue to work 
with Pat. 

Patricia Breslin, executive director for the Hotel Council, indicated that 
everyone's heard today that the Giants have been an integral part of the 
heart and spirit of San Francisco for over 50 years. Pat has been an 
integral part of the spirit and economic vitality of the City for over 33 years 

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M071 42009 



with the Giants. She thanked Pat for that. She also treasured the way that 
Pat's warm and caring attitude brings a whole room together whenever 
he spoke before the Hotel Council members, and the gracious way that 
he always accepted every request to speak, even if some were very last- 
minute. It's always been a pleasure to have his support in all of their 
venues, whether they were doing an event or he was the main event 
himself. As executive director and as a San Francisco resident who lives 
just a few blocks away, she appreciates how the different venues, both 
public and private at AT&T Park, have opened up the Embarcadero, have 
made the neighborhood so vibrant. She appreciates that everyday she 
walks outside her door. Lastly, as a charter seat holder at AT&T Park, 
she thanked him for putting up with her husband on a daily basis. He'd be 
here if he could. They enjoy every single thing, especially when they walk 
in and there's a surprise there, and it's all because of his efforts. She 
echoed other speakers' comments that after his trip to Italy, she hopes to 
see him soon. 

Audrey Joseph, Entertainment Commission, indicated that it's hard to 
follow all these people talking about how wonderful Pat is, but she wants 
to talk about what a snob he's not. Pat Gallagher is one of the few people 
that have accomplished so much and yet who will always return your 
phone call. He's always accessible and she appreciates that. He took a 
hole in the ground across the street from her nightclub and built this 
incredible ballpark, and then he gave her a private tour shortly after it 
opened. That was very exciting for her. She appreciates him, appreciates 
his availability to her always, and she's going to miss him terribly. 

Ernestine Weiss indicated that as the original promoter of the Port 
development and the welcoming of the Giants, she does not know Pat 
but she loves him very much for what he's done, and it's been a great 
ride. She's sorry she didn't know him earlier when they were campaigning 
for the Giants here, and she knew that the only way they were going to 
get them was without public financing and it worked. As an activist in the 
City and a resident nearby, she thanked him for what he's done. 

Ann Lazarus indicated that she's never had the privilege of working with 
Pat, but have had the pleasure of knowing him for many years because 
some of them have been kicking around for quite a while trying to 
accomplish some of the same positive things here in San Francisco. She 
stated the two reasons she admires about him: one is his very long-term 
career with the Giants. Thirty-three years is not something that is easily 
accomplished, and she doesn't think we're going to see a lot of that in 
coming generations. Even more is his willingness to say after such a 
great career that maybe there's something else out there for him to do. 
She's already jealous of whatever organization it is with which he 
associates himself that will benefit from his talent and his creativity. We 
look forward to hearing more about that, and to continuing our 
association with a very special San Franciscan. 

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M07 142009 



Michael Hardeman indicated that as a board member of the Convention 
and Visitors Bureau, he's had the pleasure of working with Pat over the 
years. As a season ticketholder, he's very grateful to Pat and as a San 
Franciscan because he carries everything that's good about a San 
Franciscan. If anybody wanted to design a person to carry himself with 
dignity, class, tenacity, Pat Gallagher is that and thanked him for that. Pat 
is young enough, the doors are open, and we'll be working with him. This 
is not a goodbye; this is just another door opening in his life. He looks 
forward to working with him continually in his next project. 

Pat Gallagher indicated that he wasn't quite sure what was going to 
happen today. He is incredibly touched by all the great things people 
have said. The Giants staff are probably thinking, "God, is this guy still 
around? This has been a very long goodbye." The Giants did an 
incredible event in his honor last night at the ballpark, and it was just an 
incredibly wonderful thing. He's still reeling from it. Now he comes here to 
this. 

He was wondering why he didn't see any of the people who were 
complaining about the noise from the Rolling Stones here to say nice 
things about him. So they haven't all worked. They did a ski jump 
tournament that was kind of a (e doesn't like to call things "failures), he 
calls them creative successes. That was a creative success. They did an 
ice show with Barry Manilow and Brian Boitano a couple years ago, 
which was another creative success. They also had the famous 18-foot 
amazing robot, which he thought was an incredibly great idea, that would 
go across the wall at the ballpark. His name was Rusty. Some people 
might remember him. It was part of the Old Navy Splash Landing. They 
spent millions of dollars in L.A. building Rusty. Rusty was programmed so 
that he could do anything. He could wave. He could slide. He could give 
signs. He could even make funny faces. As soon as Rusty was unveiled, 
people started to boo him. They booed him and then started throwing 
things at him. They tried to put a different face on him. For a while, they 
put Bill Clinton's face on him, and they threw more things. Then they put 
Mike Krukow's face on it. 

Eventually their partners, their friends at Old Navy, who are a fashion 
company, when something doesn't work in a fashion company, they want 
to get out of it as quickly as possible. Those who worked in baseball for a 
living, our skin's pretty thick. He thought any reaction was great, so the 
booing didn't bother him at all. At Candlestick, they love to have people 
show up and boo. 

He thanked everyone for their comments about all the things that he was 
successful at. A lot of things he was not. He always felt that he was one 
idea away from getting fired. He's not sure where 33 years came from, 
how it all happened. He's not sure why he stayed as long. He used to 

-13- 



think that this was what he did for a living but not what his life was. It's 
really not true. It really has become part of his life, and he just never 
found anything he really wanted to do any more than do this. 

He recently felt that maybe it was time to take a look at something else, 
and he doesn't have any idea what he's going to be doing. So he's sort of 
doing, which could be the smartest thing he's ever done or the stupidest 
thing he's ever done, but he feels he's leaving on a high note and leaving 
everything in good hands. There are incredible people at the Giants who, 
he's glad that they're the front people out there because they do an 
incredible job to make things happen. They're going to continue to do 
that, and he's very, very proud of them. 

He's very proud of the Emerald bowl. When they came up with that idea 
10 years ago, people said, "Yeah, just what America needs is another 
bowl game in a baseball park in San Francisco" but it actually works. It 
actually helped. The only message he could leave to the Port and the 
people who run the Port and who manage it and do all the work, is that 
there's a lot of dreams that the Port has. This is a big one over here. 
There are some big ones down here. Whoever would have thought that 
you could have built a baseball park on the waterfront in San Francisco? 
Whoever thought that would have happened? Talk about the lostest of 
lost causes. He encouraged the Port to keep dreaming and keep going, 
because it's going to be interesting 30 years from now. People are going 
to look back and see what the Port has accomplished. All these 
wonderful things are going to happen. The Port has to keep believing in 
them and keep doing them. He thanked everyone for all the nice 
comments said about him today. He's not retiring. He's just taking a little 
break, and then he's going to figure out what the next act is. 

7. CONSENT 

A. Request approval of the Fiscal Year 2009-10 Monthly Rental Rate Schedule. 
Monthlv Parking Stall Rates, and Special Event and Filming Rates. 
(Resolution No. 09-34 ) 

B. Request authorization to advertise a Request for Proposals (RFP) soliciting 
Marine Structural and Civil Engineering Services for the Pier 43 Bav Trail 
Link. (Resolution No. 09-35 ) 

C. Request authorization to advertise for competitive bids for Contract No. 
2735. Security Lighting at Pier 80. (Resolution No. 09-36 ) 

D. Reguest to award Master Contract with URS/AGS Joint Venture for As- 
Needed Engineering and Related Professional Services in an amount not to 
exceed $1.5 million. (Resolution No. 09-37 ) 



M071 42009 

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E. Accept report on the Port's Annual Contracting Activity Report - Fiscal Year 
2008/09: Fourth Quarter Period April 1. 2009 through June 30. 2009 . 

ACTION: Commissioner Lazarus moved approval; Commissioner Hardeman 
seconded the motion. All of the Commissioners were in favor. All of the items 
on the Consent Calendar were adopted; Resolution Nos. 09-34 to 09-36 
were adopted. 

8. PLANNING & DEVELOPMENT 

A. Informational presentation on the July 2009 Draft Preferred Master Plan for 
Pier 70 . 

David Beaupre, Planning and Development, indicated that the Pier 70 project 
has been a huge interdivisional and interagency effort. He acknowledged the 
following people for all their efforts: Monique Moyer, Byron Rhett, Diane 
Oshima, Jonathan Stern, Kathleen Diohep, Mark Paez, Carol Bach, Brad 
Benson, Gerry Roybal, and the San Francisco Planning Department, which 
is represented today by Director John Rahaim. 

Port staff anticipates presenting the plan to the Commission today and 
posting it on the Port's Website but finalizing the plan has required some fine 
tuning and staff will distribute the plan on Monday, July 20, 2009. 

Pier 70 is the 65-acre site that's generally located between Mariposa Street 
and 22nd Street, east of Illinois Street and bounded by the bay in the east. 
The purpose of developing the plan was to chart a course to recognize and 
preserve Pier 70's extraordinary collection of historic resources and to invite 
new economic development to the site, including generous waterfront open- 
space network, in a manner that's compatible with the existing ship repair 
operations. 

To get to this point, we've had a very extensive community planning process. 
We've hosted more than 60 public meetings and workshops, presented the 
plans and concepts, and incorporated comments from the city's diverse 
stakeholders. The Port retained the assistance of a select consultant team to 
assist Port staff with the analysis, including Economic Planning Systems, 
Roma Design Group, Carey & Company, Treadwell and Rollo, and others, to 
help us develop the plan. 

Furthermore, the Port has benefited from the collaborative process with other 
sister-city agencies such as the Planning Department and MTA, as well as 
other key state, federal, and local jurisdictions, to help us develop the plan. 
In addition, the Port Commission has heard from Port four times on the 
planning process over the last two years, and Commissioners Brandon and 
Shakofsky have participated in many of the numerous planning and 
community meetings. 



M071 42009 



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The Port seeks to complete this part of the planning process by this fall. 
Today's presentation is an overview of the preferred master-plan goals, and 
to get some feedback on those goals. There will be a community workshop 
on July 29, 2009 at Pier 1 and staff will come back to the Commission in 
August to go over more of the details of the plans and get additional insight, 
and hopefully take community comment through August and wrap this 
segment of the work. 

The plan is organized into nine chapters and an introduction, which is slightly 
different than what was presented in the staff report: 

Plan Organization 

• Introduction (overview of plan and process) 

• Site History 

• Ship Repair 

• Context for Change 

o Planning Context , Mission Bay -Eastern Neighborhoods, City's 
Economic Strategy, Past Planning Efforts, incl. EDAW, SPUR, 
2000 RFP, CWAG Goals 

o Market Assessment 
Framework Chapters 

Historic Preservation Strategy 

Land Use 

Transit and Circulation 

Open Space 

Form and Character of Infill Development and the 

Implementation Strategy 

The basis of the plan is framed around a series of eight goals that have also 
changed since the staff report, and a vision statement. The vision statement 
is: "To create a vital and inviting mix of uses at Pier 70 that integrates historic 
rehabilitation, activates public open spaces, creates a new jobs center that 
generates revenues critical to realize public benefits, and supports a 
continuing ship repair industry. " 

1 . Create a Pier 70 National Register Historic District and rehabilitate its 
extraordinary historic resources. The creation of a National Register 
Historic District provides the highest level of historical recognition, and 
actively promotes preservation and adaptive reuse of Pier 70's historic 
buildings by opening access to preservation funding sources and 
streamlined governmental review and entitlements. 

2. Preserve the long-term viability of the maritime ship repair industry. To 
maintain and embrace ship repair as an integral part of Pier 70, the Plan 
sets aside land necessary for this industry and design parameters to 
ensure new development is compatible with the operational requirements 
to support viable ship repair operations. 

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Create major new shoreline open space that extends the San Francisco 
Bay Trail and Blue Greenway to and through Pier 70. The Plan sets a 
blueprint for a major new public access and open space system for Pier 
70. Two new waterfront parks are defined, connected to a network of 
internal pedestrian-scaled courtyards and passages, and Irish Hill. They 
extend into the fabric of the Historic District and complement the 
character of Pier 70's industrial historic setting. 

Extend the City street grid to enhance public access and integrate Pier 70 
with the Central Waterfront. The street system is an important part of the 
organizational framework for existing and new uses. It provides 
orientation and structure to the urban experience, access and visibility to 
the Bay and proposed shoreline open space, and corridors for utility 
services and sustainable infrastructure. This is carrying the street grid 
down from Dog Patch and the Potrero neighborhood to provide access 
and views through the site and to provide public access onto the site. 

Provide sites for office, research, emerging technologies, light industry, 
commercial and recreational uses to expand San Francisco's economic 
base, and generate revenues to fund public benefits. The Plan identifies 
sites for a significant amount of new infill development that is compatible 
with the scale and character of the Historic District, and meets the 
functional requirements for a range of new uses. Pier 70's economic 
strategy includes public funding resources which will rely on creating a 
strong economic base to meet the preservation, open space and 
environmental commitments defined in this Plan. 

Develop a thriving new place that recalls Pier 70's historic activity, 
accommodates ship repair operations, and invites visitors to work, learn 
and play along the City's waterfront. The Plan promotes a diverse mix of 
uses including retail, arts and cultural activities, public-oriented 
institutions and recreational uses which, juxtaposed against Pier 70's ship 
repair operations, creates a unique new public waterfront destination. 



7. Promote development that is pedestrian-oriented and fosters use of 
alternative, sustainable transportation modes and practices. This 
encourages the use of alternative transportation modes and reduces the 
need and expense of accommodating the automobile. We do not want 
this to be an auto-dominated development for multiple reasons, but one is 
that the site doesn't have the capacity to bring a significant level of 
automobiles to the site, both financially and physically. To build parking 
structures is extremely expensive and is a drag on the financial feasibility 
of the project, but also that the cost to provide for automobiles is not the 
most sustainable way to allow for new development, and isn't necessarily 
appropriate for the industrial setting of the site. 



■17- 



Promote sustainable mixed use infill development and economic vitality 
that places jobs near existing housing to reduce the carbon footprint of 
regional growth, promotes pedestrian and alternative transportation 
modes and practices, and includes climate adaptation strategies 
appropriate to this waterfront location. Pier 70's goals for historic 
preservation, environmental remediation, and open space and public 
access themselves establish a strong frameworl< for sustainability. 



9. Remediate environmental contamination to enable public use and 
enjoyment of the site and its waterfront. As in typical of many industrial 
areas in waterfront settings, a considerable amount of clean-up is 
required in order to meet environmental quality standards that are 
appropriate to the new uses and public-oriented activities desired for the 
area. 



The Plan Goals define many public needs. They reflect diverse perspectives 
expressed over the course of the Pier 70 public planning process. No one 
Goal can prevail over the rest; the Plan relies on an integrated approach 
where the public and policy-makers understands and accepts each element, 
to bring the Vision to reality. 

The Goals are further refined in the Framework Policies , highlighted in staff 
report and including: 

• Historic Preservation 

• Land Use 

• Building Form and Intensity 

• Character and Quality of Infill Development 

• Open Space 

• Transit and Site Circulation 

The Plan calls for a program for the 65-acres site which: 

• Continues operation of the ship repair yard on 1 5 acres; 

• Establishes a Pier 70 National Historic District and adaptive reuse of 
approximately 700,000 square feet of historic buildings; 

• Creates approximately 1 1 acres of new waterfront open space and an 
additional 9 acres of internal open space; 

• Provides for approximately 3,000,000 square feet of new infill 
development compatible with the historic district; and 

• Integrates environmental remediation and infrastructure to support the 
Plan's mix of land uses. 



M071 42009 



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M071 42009 



This Implementation Strategy Chapter presents the regulatory partners and 
their role to implement the Plan, the financial feasibility analysis conducted to 
support the Plan, including the funding tools required. 

The financial feasibility analysis assumes the Port takes advantage of the 
financing tools afforded by recent legislative successes: Proposition D, Parks 
GO Bond and IFD, and the private investment required by a developer to 
realize the plan 

The Port will continue to receive rent from Pier 70 at the level it does 
presently, about $3 million annually. Financial feasibility analysis currently 
projects that full build-out will generate a rate of return that falls short of that 
generally required to attract private development partners. The Port 
continues to explore means to improve the financial prospects for Pier 70 
such as the Assembly Bill 1 176 to recapture the state share of tax increment 
and anticipates that its private development partners will creatively address 
this gap, which today is at $50 million. 

Besides the individuals he mentioned earlier, Mr. Beaupre also thanked the 
following: 

o Maritime division on ship repair and coordination with BAE 

o Engineering division on infrastructure architectural and Engineering 

analysis 
o Finance division on financial feasibility analysis and funding options, 

grant assistance 
o Real Estate division on adaptive reuse options and property management 
o Maintenance division on securing the buildings 
o SF Police Department on securing the buildings and escorting tours 

In addition, the Mayor's Office, Board of Supervisors (particularly, Sophie 
Maxwell and Sean Elsbernd) for their assistance on Prop D; Planning 
Department and their Commissions, the Municipal Transportation Agency, 
SHPO, State Lands, BCDC . the Water Board, all of our consultants - EPS, 
ROMA, Carey & Co. Treadwell and Rollo, OLMM, Martin Lee & CHS - the 
Central Waterfront Advisory Group, Potrero Boosters, Dog Patch 
Neighborhood, SPUR, Neighborhood Parks Council, San Francisco 
Tomorrow, Architectural Heritage and San Francisco Voters 

The Central Waterfront Advisory Group have been working on this project for 
a long time. They've been hanging in there for 10 years, trying to get 
something off the ground. The Potrero Boosters have been very generous 
with their time in allowing Port staff to take over at least four or five of their 
community meetings to present the plan and to receive input and comment 
on the plan. 

Moving fon/vard, the next steps are distribution of the plan on Monday, July 
20, 2009 which we'll make available on the web site and also distribute to 
key members of the community. On July 29, 2009, Port staff is hosting the 

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M071 42009 



final workshop to review the plan and take input and comment on. We'll 
conduct additional outreach throughout the summer, including the groups 
that were just mentioned and going to the Planning Commission and the 
Historic Preservation Commission. 

Staff will be coming back to the Port Commission on August 1 1 , 2009 to 
receive Port Commissioner comments and direction and comments from the 
public. We'll be seeking public comment till the end of August, and then in 
September we hope to come back to the Port Commission to summarize all 
of the input we've received and recommend next steps toward moving 
toward development solicitation process. 

John Rahaim, Executive Director of the City Planning Department, thanked 
Monique Moyer and her staff, particularly David Beaupre, who engaged them 
throughout this entire process. It was truly a collaborative effort, and that was 
particularly important during the eastern neighborhoods planning process, 
because the two areas abut each other and it was important for them, both 
from a physical planning as well as an economic development standpoint, to 
make sure that the plans were compatible. 

In fact, they're more than compatible. They're actually quite complementary 
to each other. As the Commission probably know, during the eastern 
neighborhoods process there was a lot of discussion over the use of 
industrial land and whether we were providing enough space for clean tech 
and biotech, and those types of businesses that wanted a place in the city. 
What Pier 70 allowed us to do is essentially provide a place for that in the 
eastern neighborhoods. It was a very good collaborative effort, a very good 
dialogue for us to have during that process. 

He likes the plan because it works on a number of levels. From a planning 
standpoint and an economic development standpoint, it fixes what needs to 
be fixed and leaves flexible what needs to be left flexible. It fixes the historic 
buildings, which we all want to be retained and restored, but also the open 
spaces and the basics of the infrastructure, which is a great way to do it: take 
the elements of a planning effort that need to be defined specifically up front 
and define those and the leaves the pretty flexible. So the areas for new 
development are fairly flexible, allowing any number of new types of 
development to come in that can support the other elements and the public 
goals of the plan. From that standpoint, it works not only in the sense of a 
land-use plan and how it lays out land uses, but also from a development 
standpoint. In his experience, it lets the plan and it lets the site be as flexible 
as possible in order to encourage the future development that we all want to 
see happen there. 

Mr. Rahaim thanked the Port Commission, Monique Moyer, David Beaupre 
and the Port staff for all their work on this project, and for allowing City 
Planning to be a collaborator on this. This is a plan that makes a lot of sense, 
and would like to see it move forward. 

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M071 42009 



Espanola Jackson, resident of Bayview Hunters Point, indicated tiiat 
Bayview Hunters Point is not included in that particular plan. She agrees with 
the plan and she's worked with the young man here for a long time but one 
of the things that she misses more since it's been 30 years is when they had 
automation and the longshoremen left from the area. Tick-Tock, the 
hamburger place that used to be across the street where everybody would 
come and eat was opened 24 hours. We definitely need a Tick-Tock in San 
Francisco, and she'd like to get a Tick-Tock in San Francisco. She loves to 
fish and would like to see an area for fishing. When they talked about Prop 
D, she had to tell people, "Vote yes for Prop D because of the fact we can 
get rid of combustion turbines (CTs)." The CTs are out. She currently serves 
on the advisory committee for the PUC, dealing with the digesters. As you 
know, there was a plan to put a digester on Port land which she fought 
against. She didn't feel that the digester needed to be at the Port. PUC just 
voted today; the digesters will be where they're supposed to be, on the area 
where all the old ones were at the sewage plant. Another thing that we don't 
have in San Francisco, especially on this side, is a place where people could 
take their boats and drop off in that area. One of the reasons she supported 
70 was that she was told there would be no hotels in that area. Also today at 
the Board of Supervisors, they were voting on selling the folks CTs. 

Joshua Arce, executive director of Brightline Defense Project, echoed one of 
the points that Ms. Jackson had mentioned, which is somewhat tangential to 
the Pier 70 redevelopment plan that Mr. Beaupre had outlined, and the Port 
has obviously outlined for years but it's actually at times front and center. 
He's worked with Ms. Jackson for over two-and-a-half years to shut the 
Potrero power plant without building a new power plant in Bayview to replace 
it. The Potrero power plant is adjacent to the redevelopment map for Pier 70. 
After seven years in Ms. Jackson's case, two and change in his case, we're 
at a point where the city is poised to no longer build a power plant, and it was 
a very Herculean effort to get to that point. There was a recent article in the 
Chronicle talking about the impact of the continued operation of the Potrero 
power plant on Pier 70. The reporter said that the Potrero power plant being 
in existence diminishes the land value in Pier 70. In their coalition, they work 
with the Sierra Club, the grassroots organizations in the Bayview. They work 
with SPUR in shutting the power plant. Never fully understood this dynamic 
by which they think the city nearly got driven into a serious energy policy 
mistake because of the Pier 70 concerns. At the PUC and Board of 
Supervisors, this subject came up again, and the city is almost at the point 
where it's again talking about building a power plant because of this Pier 70 
issue. Pier 70 is important. Pier 70 was voted upon by the voters. He'd like to 
hear David Beaupre talk about jobs for the surrounding communities. He 
heard about the job center but it's important for all these reasons. 
Nonetheless, he'd like to hear environmental justice. From here on out 
they're going to come to the meetings to hear about the environmental 
justice impact of the Pier 70 redevelopment. They want to make sure that it's 
a little bit more open and honest and transparent about the fact that they 
don't want concerns about Pier 70 and the timeline or whatever it is. They 

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M071 42009 



want to hear it in a transparent way so they know that the city doesn't get 
trapped into a dangerously, terribly energy policy decision. You wouldn't 
know it because you don't spend time at the PUC, nnaybe some folks do, but 
the city almost spent a quarter-billion dollars on an unnecessary power plant 
to replace Potrero, and now they're just learning within the past months they 
never had to do that. They support Pier 70 and all the things it's going to do 
for the port, for the community, for jobs, for disadvantaged residents of San 
Francisco, but let's be transparent and not drive the city into an energy policy 
mistake. 

Joe Boss indicated that he appreciates the feeling that we don't want to 
screw up our energy policy. He has been following this for years. At the end 
of the day, we may have to have some fossil fuel generation in San 
Francisco, and so it's important to keep an open mind on that. It could be a 
utility district that serves Pier 70, Mission Bay, and UCSF. So just don't say 
no to fossil fuel, because if we're going to build a portfolio of renewables and 
we're going to be able to sell that portfolio or the output at retail, we need to 
have some form of backup. In spite of what he just heard, we still are short a 
minimum of 25 megawatts through 2012. He would hope that San Francisco 
continues to grow beyond 2012. 

Ernestine Weiss disagreed with what the previous gentleman said about 
fossil fuels. That's thinking in the past. We have to think forward. We cannot 
go along with the same old modus operandi that we had because it's too 
damaging, and we've found that out. Hasn't anyone ever heard of liquid 
natural gas? There are so many things that we could be doing. Why should 
we go back to the old ways of doing business when we can do better? So 
please consider that. No fossil fuels. 

Commissioner Lazarus indicated that David Beaupre mentioned earlier that 
no one goal supersedes another in the list of goals, but she asked if the 
environmental remediation has to take precedence before much of anything 
else could happen there or is it confined to certain areas. 

David Beaupre replied that he does not know the answer as we are just 
starting to get out there to do the investigation through the Department of 
Defense grant funds we received. We should know by the end of the year 
what level of contamination there is out there. The early read, based on all 
the analysis that we've done, is that it's kind of similar to what was out in 
Mission Bay. Generally it should be Mission Bay clean, they call it, where 
you can do a lot of the remediation by capping or keeping in place, but there 
might be some hotspots that require cleanup and haul-away. Some level of 
remediation or remedial action plan will be required to move the plan 
forward. 

Commissioner Lazarus asked what it takes to start the process of creating 
the national historic landmark district. She's curious at what phase we can 
actually start putting that together. 

-22- 



David Beaupre replied that the nomination for Pier 70 is virtually complete. 
We need to internally strategize further to determine when we'll move 
forward with the actual submittal of the nomination. 

Mark Paez added that part of what we're trying to do is to get, much lil<e we 
did with the Embarcadero Historic District, certain agreements and 
recognition of the plan from the state agencies that would be responsible for 
the nomination going forward. We haven't exactly figured out the best way to 
achieve that, whether it's through letter agreements or something formal. 
Those are some of the areas where we're still working on. The State Office 
of Historic Preservation has jurisdiction over the nomination process before it 
goes to the National Park Service, but they don't really have jurisdiction over 
land-use plans. We have to figure out how to overcome that and get the 
recognition and essentially build in recognition of our plan in the nomination 
so that later on, when we're in the implementation process, we don't trip 
ourselves up, whether it's going for tax credits for an individual project or in 
the environmental impact process. We could, however, start the process 
now. SHPO staff did a preliminary review of our draft document, and they're 
ready to go as soon as we're ready to go. We've also asked them to give us 
feedback on the plan, and so now that we'll actually have a public version of 
that, we can be pushing that forward, in terms of getting some real feedback 
that we can respond to. 

Commissioner Lazarus indicated that it seems like it's more about strategy 
than it is about having to be at a certain point in the plan. 

Mark Paez replied that with the tax credit projects, for instance, we could 
actually do the project and have 24 months to list the property on the 
National Register after taking the credit. There isn't anything that we're 
missing out on by delaying. The State Office of Historic Preservation, in 
working with the City, has already determined this site to be an eligible 
historic district. For CEQA purposes, permitting, building permits, etc., we 
already treat Pier 70 as though it's a historic district. 

B. Informational presentation regarding parking in the Ferry Building Area . 

Jonathan Stern, Planning and Development, gave a brief update on parking 
in the Ferry Building area since the closure of Pier V2 almost a year ago, on 
July 3, 2008. Pier Vz was a humble little pier adjacent to the Ferry Building 
just north of here that had been open and operated for parking specifically to 
support the Ferry Building since the Ferry Building's grand opening in 2003. 
Shortly before that it had undergone some repairs which were deemed to be 
temporary repairs to give about five years' life to this facility. 

When the Ferry Building opened, San Francisco was in a downturn sort of 
post-dotcom bubble, and there was a lot of concern about new merchants in 
this newly opened building, the Ferry Building, and would the retailers in 



M071 42009 



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M07142009 



particular need parking as an important resource, it was deemed to be an 
important enough supporting use tliat tiiere's a parl<ing agreement tliat goes 
liand-in-liand with the Ferry Building lease that provides some publicly 
controlled parking for the Ferry Building. In this case it was Pier Va and 
Seawall Lot 351 across the street. 

We learned that this was a very well thought of supporting waterfront use. 
When the pier closed last July, the Executive Director, Port Staff, Port 
Commissioners and the Mayor's office received quite a few comments, 
concerns and protests from the public. We have been working since then to 
do what we can, really more in small ways, to improve parking in the Ferry 
Building area, something that affects not just the merchants but other tenants 
of this building and everyone in the whole Ferry Building area, which runs 
from the Agricultural Building to Pier 1, 172, 3, and 5. 

The most important thing we did is to improve accessible parking. The 
people that really lost out when Pier Vz closed were the people who needed 
to be close to their destination, that have a blue placard and need easy 
access and close access to their destination. Pier V^ had most of the 
accessible parking spaces in the Ferry Building area, and in the meantime 
we have restriped the Embarcadero frontage, starting from the Agriculture 
Building all the way to Pier 5 and one of the major things we did was add four 
or five blue spaces along the Embarcadero. 

We tried to make better use of existing parking resources. This area, 
because of the downtown work destination, has a lot of parking, thousands 
and thousands of parking spaces within a 15-minute walk. We decided to 
fine-tune the usage and the accessibility for everyone for these parking 
resources, such as valet services, garage services and meter services. 

One of the first things we did was find other places that could be usable and 
accessible for valet parking, using maximum use of the amount of paving 
and curbs that already exist to serve customers coming to the Ferry Building. 
He worked with Equity Office Partners, the managers of this building. They 
expanded their service along the frontage, the white zone in front of the Ferry 
Building, and that took until about December to get underway but it has been 
very successful since then, serving about 1700 customers a month since 
then. 

They also utilized the stub of Pier 72, the part that was not condemned. It's a 
small area, about 15 to 20 percent of the whole Pier V^ area. It serves about 
10 cars on a valet-assist basis. Because of how many people were coming to 
the waterfront today, which is unusual for a weekday, there were nine or ten 
cars parked there. That area is managed by Ace Parking, which is a 
contractor to EOP and it's part of the parking agreement. 

Seawall Lot 351, the Washington lot, is also now operated on a valet-assist 
basis. So if it does fill up, they start stacking cars, taking keys, and that has 

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M07142009 



generally, through better management, added parking to the Ferry Building 
area. 

There are lots of garages in the area. There are over 600 parking spaces in 
Embarcadero 3 and 4. The Golden Gate garage, the former 1 Maritime Plaza 
garage, has about 900. The Port and its partners, EOP and CUESA, the 
operators of the farmers market have been instrumental in this as well. 
CUESA, in particular, spearheaded an effort to get validations at the 
Embarcadero garages for the Saturday farmers market, and Port staff and 
CUESA worked to get a validation program at the Golden Gate garage. 

There are several parking situations we're trying to solve for. We know we 
can't just build a large garage and say, "Oh, anyone can come and park here 
any time." That's neither practical from a financial perspective or from a 
policy perspective, let alone having any land to do that. We're primarily 
looking at a couple of slices of the parking situation, the primary one being 
Saturday morning, when the most visitors come here as a single group for 
the farmers market. 

Midday weekday is a time that we consider that the valet serves that 
relatively well for people who want to come right to the Ferry Building as 
opposed to parking other places in downtown, which are already crowded by 
commuters. We also look at the evening crowd, since there are a lot of 
restaurants in the Ferry Building area. These garages and these validation 
programs best serve the Saturday peak, which is probably the biggest peak. 

Moving on from valet and garages, we also have made better utilization of 
meters. This is somewhat of a work in progress, but as part of the restriping 
program, we added five meters to the Embarcadero frontage at Piers VA and 
3. We have added, working with our fellow city members at SFMTA, 1 1 
spaces along Davis Street, which are now metered parking and are 
specifically good places to park during the farmers market. 

We also freed up existing metered spaces on Washington Street. These 
meters have always been publicly accessible to anyone who lives or works in 
the area, but during farmers market, our biggest peak, they are claimed 
primarily by farmers' vehicles, trucks bearing produce, workers, etc. Since 
then, through a variety of means that are detailed in the staff report, we've 
freed up all those spaces, through the hard work of CUESA staff and Port 
staff. There are approximately 50 spaces that are currently available to the 
general public and customers at those times. These are a lot of work that 
we've done using places essentially that are already used for parking. 
There are some ideas that we are currently working on that haven't come to 
fruition. The first is not only do we have the closure of Pier /4 because of 
structural condition, but PUC has a larger project going on, the North Shore 
Force Main Project that will improve sewer services in the entire northeast 
sector of the city, and one of the primary construction sites for that will be 
Seawall lot 351 on Washington and Embarcadero. It will be under 

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M07 142009 



construction next summer, and it will displace about 40 parking spaces at 
SWL 351 . In order to mitigate parking impacts of the sewer construction 
activity on area parking, PUC will fund a Saturday morning parking shuttle 
bus during summer 2010. 

We think it's a great opportunity to go further afield, use parking resources 
that perhaps are not as accessible by people by foot, once you park and 
walk to the Ferry Building and the farmer's market. We will be finalizing the 
shuttle service this year and rolling out next summer, and see if that can 
become a permanent fixture to connect existing parking resources with 
people who want to go to the Ferry Building. 

Finally an idea that was brought up primarily by EOP and CUESA is 
improvements to Ferry Plaza. Most of Ferry Plaza is within the leasehold of 
the Ferry Building, and it currently looks like a parking lot. It's a large 
concrete area. It is not a parking lot although it does have loading and 
unloading, but it also has to serve BART, it has to serve the Ferry district, it 
has to serve the World Trade Club. It's a multiuse area, as is most of the 
port. 

EOP has approached the Port and BCDC staff to look at their idea, which 
we're starting to vet right now, of moving forward with improvements on the 
plaza area. These improvements would be paid for through temporary 
parking (approximately 4 years) of up to 65 cars in the center of the plaza. 
EOP still feel stretched by the loss of Pier Vt. and would like to see additional 
parking. They believe that temporary use of it would allow a bridging effort to 
put other things in place, such as better signage and better connection to 
existing parking. It also gives a funding stream, since parking is something 
that San Franciscans and visitors seem to be willing to pay for, to do some of 
the improvements that they are proposing as part of that package. This is 
something that we're working very closely with EOP, their consultants and 
BCDC. We hope to come up with something successful that we'll bring to the 
Commission later this year. 

We're also working on the Ferry Building Area Implementation Plan. 
Essentially there are a number of projects which are really the last big 
projects in the Ferry Building area that are coming to us at a staff level. In 
December of last year, staff brought to the Commission WETA's expansion 
of the downtown ferry terminal project. They would like to expand from 
approximately six berths to twelve, and they'd like to build those in the next 
three to five years. Also the rehabilitation of Ag Building is a project that goes 
hand in hand with building ferry terminals behind it. 

The Ferry Building area is so tight and there are so many users here that it's 
time to look at all the different uses such as pedestrian access, bicycle 
access, intermodal transfers with the regional buses and ferries that come 
here and as part of that effort we'll be exploring a number of ideas for all 
transportation uses, including parking. One of the ideas we'll be looking at is 

-26- 



M07 142009 



the feasibility of continued use for Pier 1/2 or is it something that should be 
demolished, per the Waterfront Land Use Plan and BCDC Special Area 
Plan, or should we use it for a ferry terminal, etc. These are issues that'll be 
scored in this implementation plan. 

Similarly, other areas have been identified at various times for parking, 
including the Ferry Plaza idea, the lagoon area, or what he refers to as the 
Pier 2 area, where there is a lot of parking now. Is that temporary use? Is 
that permanent use? What will the ultimate transportation network look like in 
the Ferry Building area? We're hoping to address that in that planning effort. 

Finally, he reminded the Commission of an issue that has come before them 
numerous times i.e. Seawall Lot 351, which is currently being used as a 
parking lot. One of the conditions of approval of the award of the exclusive 
negotiations the Port Commission approved in February is that the developer 
will be replacing parking. There are temporary issues of what happens to 
parking during construction of that project if it moves forward. It's currently 
subject to a planning process that's underway. The developer also proposed 
an alternate project that would increase the number of publicly accessible 
parking spots there from 90 to 250. So as part of the ENA period, we will be 
exploring all of those options. 

Finally he referred to Table 1 of the staff report that tallies up a lot of the 
changes he discussed. He does not know if these numbers are directly 
comparable. It tries to show the parking availability on the Saturday a.m. 
farmer's market peak, and it looks like we've gone from about 200 or 210 
spaces to about 250 spaces. Again, we've largely done this by making more 
meters accessible, by building relationships with new garages i.e., the 
Golden Gate garage and the Embarcadero Center garages and creating 
more spaces through valet parking. 

Andy Thornley, San Francisco Bicycle Coalition, indicated that the Bike 
Coalition is very keen on having the waterside of the Embarcadero get more 
and more friendly for pedestrians and bicyclists. It's already a huge attractor. 
People come from all over the world to enjoy it. It has the potential to be 
even more wonderful. 

That's part of why they're interested in parking at the Embarcadero, because 
to the extent that we maintain and even enhance parking on the waterside of 
the Embarcadero, we diminish and injure the waterside Embarcadero for 
pedestrians and bicyclists. He asked if the Port knows how much parking is 
needed for the Ferry Building. Apart from the contractual obligations that the 
Port has with the tenants in the Ferry Building and he respects that the Port 
can't unilaterally break those, he thinks that there is an assumption that 
needs to be questioned, that everybody knows there will always be this 
many cars that need to come here and that everybody knows the best 
customers for all of the businesses drive here. It may be true but we need to 
find that out. He proposed that before the Port Commission make any 
commitments to any establishment or enhancement of parking on the 

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M071 42009 



waterside, in the Ferry Plaza, a very precious space, that the Commission 
stop and make a prerequisite or a condition of going forward with any further 
establishment of parking, even temporary. A couple of years is a long time. 
He strongly suggested that the Port consider a modal access and economic 
survey i.e. how do people get here, how much money do they spend, how 
often do they come? 

Over and over again we've seen this. On Columbus recently and downtown, 
in both cases the Transportation Authority aided other efforts to take that 
question: how do people get here, how much money do they spend, how 
often do they come? Every time that question is asked, the initial assumption 
that our best customers drive is contradicted. In fact, most people are 
coming by transit, walking, bicycling. Folks on foot, in particular, come often. 
They might buy a little less, but they come very often and they walk away. 
He's not sure what the answer to that question is. He does not want to 
prejudice this by saying that they know that the best customers are coming 
by bike. A lot of the customers come in different ways and it's cheap to find 
out. According to MTA staff, it's probably $10,000, $20,000 at most. It's 
probably something that the Port can steal from a standing contract and 
carry out to settle that question about how people get here. Why does 
parking matter to bicyclists? If you provide parking, cars will come. Mr. Stern 
has heard him say it many times: if you put out a dish of cat food, don't be 
surprised if stray cats come around. If you don't want a lot of stray cats 
coming around your ankles, don't put out so much cat food. . There is a more 
scientific way to approach this. He hopes that the Port will take a moment to 
check out where the customers are coming from, how they get here, 
because the answer might be surprising. 

Tom Radulovich indicated that as a BART director, the ugly structure out 
there does two things. (1) It's the World Trade Club or it used to be but don't 
know what the current status is; and (2) It is one of the most important 
security concerns that they have at the BART system. It hides the ventilation 
structure, which connects directly to the trans-Bay tube. If anything were to 
happen with that structure, any water were to get in, it would flood the BART 
system, all three levels of Embarcadero Station; it would flood MUNI Metro 
back to Van Ness Station, and flood the BART system back to 16th Street 
Station, not to mention the East Bay side. They are very concerned about 
people getting near that structure. He hopes, just as somebody who's been 
entrusted by the voters, and a member of the BART directors, knowing what 
he knows about the vulnerability, that parking out on this plaza would be a 
nonstarter. The security of the city, the Port and the economic wellbeing of 
the Bay Area depends on BART and MUNI Metro running and we can't have 
any parking out there. One could bring a large vehicle full of explosives in 
close proximity, and it's too big a risk. He hopes that the temporary parking 
that's being discussed is a nonstarter. Before September 1 1 , we might have 
thought differently about it, but now security's got to be paramount. 



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M071 42009 



As BART director, we have spent billions of dollars as a region enhancing 
transit access to this very spot. Embarcadero's the busiest station in the 
BART system. It's the busiest station west of the Mississippi. The entire 
BART system will bring people here. The MUNI metro system and the MUNI 
bus system all focus on this spot. The regional ferry system center's right 
here. We have an incredible wealth of transit. 

We've expanded it hugely since the 1989 earthquake. We have built a 
waterfront transit line. We've built two extensions in the East Bay. We built 
the BART SFO extension. We've expanded MUNI Metro. We will be 
expending additional money to bring CalTrain and high-speed rail to within a 
few blocks of this spot, to expand the region's ferry network, to expand the 
city's transit network. We don't need more parking here. We have created an 
incredible transit hub here, richer transit than any place west of the Chicago 
Loop but you come here and you see parking lot. That's an insane use of 
land here. We really need to turn these into public spaces. These need to be 
public-serving buildings. The waterfront's precious. We have so little public 
waterfront in San Francisco. This is the most accessible spot on the 
waterfront. Unfortunately parking's been the tail that wags the dog. Pier Vi 
should have been a plaza. We should have linked Pier 1 and the Ferry 
Building with the plaza. He asked the Commission to put public spaces 
foremost and paramount and parking needs to take a subordinate role. 

Ernestine Weiss thanked Tom Radulovich for his comments. He said it the 
way it is. The truth is we don't need more cars. This is not the wave of the 
future. Cars are a thing of the past. The reason why people are renting 
Infinity by the droves is because they can walk to work. All the 
condominiums developed downtown are focused on walking to work. It's not 
just San Francisco. Other big cities are focusing on the same thing. The 
pollution from cars is causing cancer. People are dying left and right from all 
this poison in the air. There's a gridlock here. Where are we going with it? It's 
foolish planning. We need to do a parking survey. Wilbur Smith has done it in 
the past and he should come in again to see what the need is and what the 
bad things are and so forth. 

Prior to the earthquake, this parking lot was a dingy industrial area with a big, 
huge parking lot right next to Justin Herman Plaza. We don't want to 
encourage that kind of thing anymore. We have an opportunity to make the 
waterfront a beautiful place. We need more walkers, we need more bikers. 
Zip cars are coming along down the pike. People are using them more and 
more. We have all the best transportation right down here. We've got to get 
wise so she suggested having shuttles, park and ride which other cities 
have. We should be thinking along those terms. This is the better way to go. 
So let's forget about cars, let's develop this waterfront to be a beautiful area 
that it deserves, and let's get rid of cars once and for all. Jonathan Stern just 
listed all the parking garages in the area. We don't need more cars. If she 
has it her way, there won't be a 600-car garage here. When she first came 
along this waterfront development, the first thing she did was get Dennis 

-29- 



Bouey fired because he wanted to build a garage underneath the park on 
block 202. Then we got a new director of the port. Now it's rearing its ugly 
head again, another 600-car garage is being proposed. We don't need it. 

Jane Connors, property manager for the Ferry Building, indicated that it's a 
real honor to run this property for the Port of San Francisco and for the City 
and County of San Francisco, and for Equity Office. She commended Port 
staff for working with them since July 3, 2008. They have literally been 
meeting almost once or twice a week about this issue and just making 
incredible headway and making great compromises, and a lot of progress 
since last year. She commended Jonathan Stern, Phil Williamson, and 
Kathleen Diohep for their efforts. 

To answer some of the inquiries today, they have a Princeton intern working 
with EOP this summer specifically to do surveys. They're going to be doing 
DOT surveys, wherein they're going to be interviewing people on the 
Saturday, Tuesday, and Thursday markets and determining how they get 
here, how much they spend, how frequently they come down to the building. 
They will certainly share that information with the Port and with the public. 
They are working with Jonathan and Phil on some of those Q&As. Some 
answers will be had about that. Granville Island, which is probably the 
property we most compare the Ferry Building to, has approximately 1500 
parking spaces, and those are even short order for them. We operate under 
150 parking spaces. The information that Jonathan put together is 
specifically for Saturdays. One of their big issues is about the availability of 
parking the rest of the week, and supporting their shops during the rest of 
those days. Saturdays might just be the busiest day down here, not just 
because of the abundance of produce, but also because of the abundance of 
parking. The issues that they are discussing with the Port is about 
considering all the stakeholders. It's considering commuters, bikers, people 
that are driving here, people that are walking here. They are considering all 
of those needs and how they can make them work collectively together to 
support the Ferry Building. 

Mr. Nixon indicated that he frequently come by here on Saturdays, going 
from BART to get on the ferry. The crowds here make it very difficult to make 
that transition. It seems to him that if there's any space available anywhere 
for parking, perhaps some of that space would be used to open up the area 
where the farmer's market is in order to have a good connection between the 
BART station and the ferries on those crowded Saturdays. It can take a long 
time to get through there, and if you miss your ferry it's a big problem. 

Commissioner Lazarus thanked staff for the report. She was the instigator of 
this a few meetings ago, and she appreciates the very well-organized and 
thoughtful analysis that Jonathan provided. She did not see this to be a 
forum for talking about future parking as much as how we were responding 
to a situation that had happened beyond our control and a contractual 



M07 142009 



-30- 



obligation. She's heard that we've tried to be a good neighbor and supporter 
of what's going on around here, and that's what she was interested in. 

9. FINANCE AND ADMINISTRATION 

A. Request approval of the Municipal Debt Policy for the Port of San Francisco. 
(Resolution No. 09-38 ) 

Tina Olson, Deputy Director of Finance and Administration indicated that we 
are debt free! Ms. Moyer added that the Port is debt free for the first time in 
49 years! 

Tina Olson indicated that we have been in the process of planning to issue 
new revenue bonds this fall. The three items before the Commission are the 
first step for Port Commission authorization on several documents that we 
need to start that process. Staff will be back to the Commission in the fall 
with the actual request to issue bonds and appropriate the bond proceeds. 

As the Commission is aware, the charter authorizes the Port Commission to 
issue bonds. It is good financial management practice to have a debt policy 
in place for any organization that's going to incur debt. The Port doesn't have 
one so we created one. The City and County of San Francisco itself has a 
debt policy because Monique Moyer wrote it. Other city agencies such as the 
airport and the Public Utilities Commission has a debt policy. 

Port staff used the city's and the airport's as a model to develop a debt policy 
for the Port of San Francisco. She commended Larry Brown for taking the 
lead at the Port to prepare the debt policy, Bob Gamble, our financial 
advisor, as well as Christine Lee, who works for Bob Gamble, and Vince 
McCarley, who's also one of our financial advisors. They did all of the work 
on it. It's quite comprehensive. She's new to the debt-issuance world and 
she found it easy to understand. 

It essentially commits the Port to adhere to a sound debt-issuance and 
management practice to achieve the lowest practical costs of borrowing at a 
prudent level of risk and obtaining access to capital markets. It's also 
important to note that it's going to document the Port's debt-issuance and 
management practices. It provides transparency to rating agencies, bond 
buyers, and the public. It includes a legal framework, in terms of how the Port 
has the authority to issue debt. The types of borrowing that we could enter 
into, such as the revenue bonds, the one we're looking to in the fall, special 
facility bonds, equipment lease financing, and debt refinancing when interest 
rates drop. It identifies approval processes such as the CFO and the 
executive director would have to approve any kind of debt-issuance before it 
goes to the Port Commission. It sets the debt affordability targets. This is 
probably one of the most important elements of the debt policy including 
minimum debt service coverage of 1.15, and an unappropriated operating 
reserve of 15 percent. Over a year ago, the Port Commission adopted the 

M071 42009 

-31- 



Operating Reserve Policy to budget an operating reserve of 15% of the 
Port's total operating expenses. 

The Debt Policy identifies permitted uses of bond proceeds for the capital 
projects, refinancing Port debt, etc. It has the disclosure and reporting 
requirements, and it identifies the financial and other professional services 
that Port staff can procure in order to issue debt, lil<e the financial advisor, 
bond counsel. It talks about the ongoing debt administration and developing 
the five-year financial model, submitting the required reports, essentially 
putting into writing the commitment in the Port to do that. It includes criteria 
for various methods of placement: the competitive sale and negotiated sale. 
As noted in the staff report, we envision that the Port will be doing a 
negotiated sale this fall. We haven't been in the market in a long time. The 
Port of San Francisco is not like a traditional port. We're a little bit of a mix 
between a redevelopment agency and a traditional port. It's going to be a bit 
of a sell and a story credit. 

She noted the extensive glossary of terms and the rating agency table. We 
have different rating agencies and they give different ratings but what does it 
all mean? That is essentially what the debt policy is in a nutshell. 

Commissioner Lazarus commented that the policy is very well done, very 
thorough and it feels good to have this policy in place. 

ACTION: Commissioner Lazarus moved approval; Commissioner Hardeman 
seconded the motion. All of the Commissioners were in favor. Resolution No. 
09-38 was adopted. 

B. Request approval of the Port's Proposed 2009/10 Revenue Bond Proiects. 
(Resolution No. 09-39 ) 

Tina Olson, Deputy Director of Finance and Administration indicated that this 
resolution is to approve the revenue bond projects. This will be the third time 
the Commission has seen this list of projects. Staff made an informational 
presentation to the Commission in May. It's the exact same list of projects 
and the exact same dollar amount. The cruise terminal project $22 million; 
Piers 19 or 23 $18 million; Pier 33 North $2 million; Pier 50 entryway $10 
million and the backlands and seawall repair $8 million for a total of $60 
million in projects. As noted in the staff report the total bond issuance would 
be about $66 million which includes the issuance costs and the reserve fund 
that we have to create. 

We were looking for projects that would increase the Port's overall revenue 
base, and we've estimated these projects will bring in about $6 million. We 
also wanted projects that were going to achieve the Port's mission of 
maritime and public access, and the cruise terminal provides that, plus the 
revenue increase. The cruise terminal is our star project for that reason. We 
also wanted to make sure that our Pier 50 facilities where our Maintenance 



M071 42009 



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M07 142009 



employees work are safe. The economic impact on these projects would 
generate about 877 permanent jobs in San Francisco by having new uses for 
underutilized port facilities, and about a million dollars in general-fund money 
to the city. We consider this the compelling reason to bring these projects 
forward. 

With regard to the Port's debt capacity, staff did an analysis which is included 
in the staff report. The $66 million bond is below our debt capacity because 
we have a debt capacity of 106.4 million, $95 million of which could be for 
projects. The $66 million is a $4.7 million annual debt service payment, and 
that's what we have in the budget. If we were to take the Port all the way up 
to its debt capacity, we'd need another $3 million annually budgeted for debt 
service. That gives us an idea of what a goal can be, in terms of additional 
future projects. 

This fall, we are expecting to come forward with a bond issuance. It would be 
the first of two and it will fund the design of the cruise terminal, design for 
Piers 19 or 23, construction at Pier 33, construction at Pier 15 and 
construction in the backlands. For the CEQA review for Piers 19 or 23 or the 
cruise terminal, staff will come back and issue a debt for the construction 
phases of those projects. It will probably be in a couple of years. 

ACTION: Commissioner Hardeman moved approval; Commissioner Lazarus 
seconded the motion. All of the Commissioners were in favor. Resolution No. 
09-39 was adopted. 

Request approval of a Reimbursement Resolution related to the Proposed 
Port Revenue Bond Issuance. (Resolution No. 09-40 ) 

Tina Olson, Deputy Director of Finance and Administration indicated that in 
preparing to issue bonds, we're incurring costs right now. We have financial 
advisors, bond counsel and underwriters on board. We've also appropriated 
funds and sent different work orders to City Planning for the CEQA review 
process for these projects, as well as started the design on the cruise 
terminal. All of these costs are being incurred in advance of issuing the 
bonds. In order to reimburse those costs with the bond proceeds, we need to 
have a bond reimbursement resolution which is required by Section 1.150-2 
of the Treasury regulations. 

Commissioner Fong pointed out that it's kind of funny that there's nobody 
here (except for Marty Coressel) to listen to Tina's presentation because this 
is a real turning point for the Port to get into its next chapter. He thanked Tina 
Olson, Larry Brown and Monique Moyer and her expertise to get us through 
this, and over the last few years, to point out the capital projects, now to find 
sources for them. He's very proud to be part of it. 

ACTION: Commissioner Lazarus moved approval; Commissioner Hardeman 
seconded the motion. All of the Commissioners were in favor. Resolution No. 

-33- 



09-40 was adopted. 

10. NEW BUSINESS / AGENDA SETTING 

Monique Moyer indicated that it was great to see everybody who came out for both 
Bill Schiavo and Pat Gallagher. She apologized that it tool< a little bit longer, but it 
was a really nice treat. 

Going forward, our next meeting is August 11, 2009 and we will be coming back to 
the Port Commission with the changes that were made to our budget proposal 
through negotiations with the Mayor's office and the Board of Supervisors. It's not 
significant but it is enough that we would like to share all of that with the 
Commission and the public. It was a much easier process in every respect this 
year than previous years. Even the finance committee was such a different place 
to do business, and almost everybody's talking about that. It was very pleasant. 

As the Commission is aware, the Municipal Transportation Authority adopted a 
bike plan. It does have implications for the Port, so MTA staff will be making a 
presentation at the next meeting. Jonathan Stern, in his presentation, alluded to 
the work that needs to be done by PUC at Seawall lot 351 . We hope to bring the 
MOD to the Commission at the next meeting but they need to go to their 
commission first. The big news is the Exploratorium project. If all goes well, it will 
be before the Commission for its review and consideration at the next meeting. 

While it's not as many items as normal, it's probably a pretty full agenda. Jennifer 
Sobol has hinted about her staff report that there will be at least 25 pages on the 
Exploratorium. The CEQA recitals will go on for days. The Commission will also be 
receiving the Pier 70 Master Plan on Monday, July 20, 2009. Staff will be back at 
the August 11*^ meeting to receive comments from the Commission and the public. 
She complimented staff for all their efforts. 

11. PUBLIC COMMENT 

12. COMMUNICATIONS 

13. ADJOURNMENT 

ACTION: Commissioner Hardeman moved approval; Commissioner Lazarus 
seconded the motion. All of the Commissioners were in favor. 

Commission President Rodney Fong adjourned the meeting at 5:25 p.m. 



M071 42009 

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SAN FRANCISCO PORT COMMISSION 

Rodney Fong, President 

Stephanie Shakofsky, Vice President 

Michael Hardeman, Commissioner 

Ann Lazarus, Commissioner 

Monique Moyer, Executive Director Amy Quesada, Commission Secretary 

Phone: 415-274-0400; Fax: 415-274-0412 Phone: 415-274-0406; Fax: 415-274-0412 

AGENDA 

TUESDAY, AUGUST 11, 2009 

2:00 P.M. CLOSED SESSION 

3:15 P.M. OPEN SESSION 

PORT COMMISSION HEARING ROOM, SECOND FLOOR 

FERRY BUILDING, SAN FRANCISCO, CA 94111 



The Port Commission Agenda as well as Staff Reports/Explanatory Documents available to the 
public and provided to the Commission are posted on the Port's Website at www.sfport.com. 
The agenda packet is also available at the Pier 1 Reception Desk. 

If any materials related to an item on this agenda have been distributed to the Port Commission 
after distribution of the agenda packet, those materials are available for public inspection at the 
Port Commission Secretary's office located at Pier 1 during normal office hours. 



1 . CALL TO ORDER / ROLL CALL nn^?.^^^^'^^^"^ 

DOCUMENTS DEPT 

2. APPROVAL OF MINUTES - July 14, 2009 

^ AUG -6 2009 

3. PUBLIC COMMENT ON EXECUTIVE SESSION 

SAN FRANCISCO 

4. EXECUTIVE SESSION PUBLIC LIBRARY 

A. Vote on whether to hold closed session to confer with Legal Counsel and 
Real Property Negotiator. 

(1 ) Discussion of Executive Director's Performance Evaluation for Fiscal 
Year 2008-09 pursuant to Section 67.10(b) of the Administrative Code 
and Section 54957(b) of the California Government Code. 

(2) CONFERENCE WITH LEGAL COUNSEL REGARDING EXISTING 
LITIGATION MATTER (DISCUSSION & ACTION ITEM). 



A08 112009 



a. Discuss existing litigation matter pursuant to California Government 
Code Section 54956.9(a) and San Francisco Administrative Code 
Section 67.10(d) (1 case). 

• F. Alioto Company, inc. v. Citv and County of San Francisco and 
ExxonMobil Oil Corporation . Superior Court for the State of 
California, County of San Francisco (Case No. CGC-89-489792) 

(3) CONFERENCE WITH REAL PROPERTY NEGOTIATOR - This is 
specifically authorized under California Government Code Section 
54956.8. This session is closed to any non-Citv/Port 
representative.* 

a. Property : Pier 15/17 (Embarcadero at Green Street) 

Person Negotiating : Port: Byron Rhett, Deputy Director, Planning and 

Development 

*The Exploratorium: Dennis Bartels 

Under Negotiation: Price ^Terms of Payment X_Both 

An executive session has been calendared to give direction to staff 
regarding real estate negotiations for Port property located at Pier 
15/17. 

5. RECONVENE IN OPEN SESSION 

A. Possible report on actions taken in closed session pursuant to 
Government Code Section 54957.1 and San Francisco Administrative 
Code Section 67.12. 

B. Vote in open session on whether to disclose any or all executive session 
discussions pursuant to Government Code Section 54957.1 and San 
Francisco Administrative Code Section 67.12. 

6. ANNOUNCEMENT OF PROHIBITION OF SOUND PRODUCING DEVICES 
DURING THE MEETING 

Please be advised that the ringing of and use of cell phones, pagers, and similar 
sound-producing electronic devices are prohibited at this meeting. Please be 
advised that the Chair may order the removal from the meeting room of any 
person(s) responsible for the ringing or use of a cell phone, pager, or other similar 
sound-producing electronic device. 

7. EXECUTIVE 

A. Executive Director's Report 



A08112009 



• Extension of the response deadline for the RFP for a Concrete Batching 
or Asphalt Production Facility at Seawall Lot 352 - from September 17, 
2009 to October 29, 2009 

• Environmental Award to Princess Cruises 

• Congresswoman Loretta Sanchez's visit to the Port of San Francisco - 
August 7, 2009 

• Speaker of the House Nancy Pelosi's visit to the Port of San Francisco - 
August 10, 2009 

8. CONSENT 

A. Request approval of Fifth Amendment to Lease No. L-12540 with SF 
Recycling and Disposal, Inc. at Pier 96 near Cargo Way. (Resolution No. 09- 
41) 

B. Request approval of Memorandum of Understanding between the San 
Francisco Public Utilities Commission and the Port regarding the North Shore 
Force Main Sewer Improvement Project (Embarcadero, Drumm and Spear 
Streets) including Seawall Lot 351 located at Washington and the 
Embarcadero. (Resolution No. 09-42) 

C. Request approval of Fiscal Year 2009-10 Executive Director Salary and 
Benefits. (Resolution No. 09-43) 

D. Request authorization to accept and expend $5,771 ,340 in Proposition 1 B 
Grant Funds from the California Office of Homeland and Security for security 
improvements at the Port. (Resolution No. 09-44) 

9. FINANCE AND ADMINISTRATION 

A. Request approval of the Port's Revised Annual Operating and Capital 
Budgets for Fiscal Year 2009-10. (Resolution No. 09-45) 

10. PLANNING & DEVELOPMENT 

A. Informational presentation on the Exploratorium Project at Piers 15 and 17 on 
The Embarcadero at Green Street. 

B. Informational presentation on the July 2009 Draft Preferred Master Plan for 
Pier 70 and July 29, 2009 Pier 70 Community Workshop. 

1 1 . NEW BUSINESS / AGENDA SETTING 

♦ New Business 

♦ Agenda Setting (Targeted Commission meeting, subject to change) 

• Informational presentation on the Implementation of the Port's Americans 
With Disabilities Act (ADA) Transition Plan (September 8, 2009) 

A08112009 



A08 112009 



Informational update on the Port's Facility Assessment Program 
(September 8, 2009) 

Informational presentation on Taylor Street Improvement Project 
(September 8, 2009) 

Update on the Port's 2008 Clean and Safe Neighborhood Parks General 
Obligation Bond Program (September 8, 2009) 
Request adoption of the required California Environmental Quality Act 
Findings and the Mitigation Monitoring and Reporting Program in 
connection with the lease, development and historic rehabilitation of Piers 
15 and 17 by The Exploratorium, a California not-for-profit corporation. 
(September 8, 2009) 

Request approval of the Lease Disposition and Development Agreement, 
Lease and Parking Agreement with The Exploratorium, a California not-for- 
profit corporation; request approval of the Tripartite Agreement with 
Baydelta Maritime, Inc. and The Exploratorium for relocation of Baydelta 
Maritime Inc.'s operations from Pier 15 to Pier 17; request approval of 
Schematic Drawings and of Amendments to the Waterfront Land Use Plan 
(September 8, 2009) 

Request authorization to award two (2) three-year leases for surface 
parking: Bid Opportunity A: Seawall Lot 301 commonly known as the 
Triangle Parking Lot, bounded by Taylor Street, Jefferson Street, and 
Powell Street and SWL 314 bounded by the Embarcadero, Bay Street, and 
Kearny Street; and Bid Opportunity B: Seawall Lots 322-1 bounded by 
Front Street and Broadway, SWL 323 bounded by Davis Street and the 
Embarcadero, SWL 321 bounded by Front Street, Green Street and the 
Embarcadero and SWL 324 bounded by Davis Street, Front Street and the 
Embarcadero, all located in the northern waterfront (September 8, 2009) 
Informational presentation regarding San Francisco Municipal 
Transportation Agency's Bike Plan as it relates to Port property (September 
22, 2009) 

Informational presentation regarding proposed water taxi service at the 
Port of San Francisco (September 22, 2009) 

Request approval of Self-Operation and Maintenance of Foreign Trade 
Zone (September 22, 2009) 

Request approval of the Port Commission of the City and County of San 
Francisco Revenue Bond Issuance, Series 2009 (the "2009 Bonds") 
September 22, 2009 

Request authorization to award Contract No. 2735, Security Lighting 
Project at Pier 80 (September 22, 2009) 

Request authorization to award Construction Contract No. 2721 for ADA 
Upgrades at 401 Terry Francois Boulevard (September 22, 2009) 
Request approval of the Port's Interim Leasing Policy for Historic 
Structures (Date to be determined) 

Request authorization to award Pier 45 drainage improvements project 
(Date to be determined) 

Request authorization to award the Marine Structural and Civil Engineering 
Services Contract for the Pier 43 Bay Trail Link Project (October 1 3, 2009) 

-4- 



• Informational presentation on development opportunities for Seawall Lot 
330 (located on The Embarcadero at Beale and Brannan Streets) (Date to 
be determined) 

• Request authorization to enter into an Exclusive Negotiation Agreement 
with Seawall Lot 337 Associates, LLC to explore a mixed-use development 
project at SWL 337 and Pier 48 (Date to be determined) 

• Request authorization to enter into a Memorandum of Understanding with 
the San Francisco Municipal Transportation Agency for the Port of San 
Francisco to relinquish its rights to cargo freight rail service north of Cesar 
Chavez along Illinois Street (Date to be determined) 

12. PUBLIC COMMENT 

Public comment is permitted on any matter within Port jurisdiction and is not limited 
to agenda items. Public comment on non-agenda items may be raised during New 
Business/Public Comment. A member of the public has up to three minutes to 
make pertinent public comments before action is taken on any agenda item and 
during the new business/public comment period. It is strongly recommended that 
public comments be submitted in writing so they can be distributed to the 
Commissioners for their review. Please fill out a speaker card and hand it to the 
Commission Secretary. If you have any question regarding the agenda, please 
contact the Commission Secretary at 274-0406. 

13. COMMUNICATIONS 

Communications to the Port Commission from Julv 10. 2009 to August 6. 2009: 

• From Port staff, regarding Draft Pier 70 Preferred Master Plan 

• From the Potrero Boosters Neighborhood Association, copy of The Potrero 
Community Voice 

• From SF Bay Conservation and Development Commission, regarding public 
hearing on the possible amendment to the San Francisco Waterfront Special 
Area Plan 

• From Port staff, copy of the Final Environmental Impact Report for the 
Exploratorium Project at Piers 15 and 17 

14. ADJOURNMENT 



A08 112009 



DATE 


TIME 


Sept. 8 


2:00 p.m. 




3:15 p.m. 


Sept. 22 


2:00 p.m. 




3:15 p.m. 


NOTES: 





SEPTEMBER 2009 
CALENDAR OF UPCOMING PORT MEETINGS - OPEN TO THE PUBLIC 

GROUP LOCATION 

Closed Session/Port Commission Port Commission Room 

Open Session @ Ferry Building 

Closed Session/Port Commission Port Commission Room 

Open Session @ Ferry Building 



The San Francisco Port Commission meets regularly on the second and fourth Tuesday of the 
month at 3:15 p.m., unless otherwise noticed. The Commission Agenda and staff reports are 
posted on the Port's Website @ www.sfport.com. Contact Amy Quesada at 274-0406. 

The Fisherman's Wharf Waterfront Advisory Group (FWWAG) meets regularly on a bi-monthly 
basis, on the third Tuesday of the month. The regular meeting time and place is 9:00 a.m. at 
Scoma's Restaurant, Pier 47 at Fisherman's Wharf. Contact Michael Nerney @ 274-0416 or 
michael.nerney@sfport.com 

The Maritime Commerce Advisory Committee (MCAC) meets on a quarterly basis, on the third 
Thursday of the month, from 1 1 :30 a.m. to 1 :00 p.m. @ Pier 1 . Contact Jim Maloney @ 274- 
0519 orjim.maloney@sfport.com 

The Mission Bay Citizens Advisory Committee meets regularly on the second Thursday of the 
month, from 5:30 to 7:30 p.m. at the Mission Bay Visitor Center (255 Channel Street). Contact 
Catherine Reilly, Assistant Project Manager, Redevelopment Agency, @ 749-2516 or Catherine 
Reilly/REDEV/SFGOV@SFGOV 

The Northeast Waterfront Advisory Group (NEWAG) meets regularly on a bi-monthly basis on 
the first Wednesday of the month from 5:00 p.m. to 7:00 p.m. in the Bayside Conference Room 
@ Pier 1. Contact Jonathan Stern @ 274-0545 orjonathan.stern@sfport.com 

The Central Waterfront Advisory Group (CWAG) meets monthly on an as-needed basis, 
generally on the third Wednesday of the month from 5 to 7 p.m. in the Bayside Conference 
Room at Pier 1 . Contact Mark Paez @ 705-8674 or mark,paez@sfport.com 

The Rincon Point-South Beach Citizens Advisory Committee meets on a quarterly basis, from 
5:00-7:00 p.m. at the South Beach Yacht Club (Pier 40 on The Embarcadero). Contact 
Catherine Reilly, Assistant Project Manager, Redevelopment Agency, @ 749-2516 or 
Catherine.Reilly/REDEV/SFGOV@SFGOV 

The Southern Waterfront Advisory Committee (SWAC) meets every last Wednesday of the 
month from 6:15 to 8:15 p.m. Location to be determined. Contact David Beaupre @ 274-0539 or 
david.beaupre@sfport.com 

The Waterfront Design Advisory Committee (WDAC) meets jointly with the Design Review 
Board of the Bay Conservation and Development Commission on the first Monday of the month 
at BCDC, 50 California Street, Rm. 2600, at 6:30 p.m. The Committee meets as needed on the 
fourth Monday of the month at 6:30 p.m. in the Bayside Conf. Rm. @ Pier 1. Contact Dan 
Hodapp @ 274-0625 or dan.hodapp@sfport.com 



A08 112009 



ACCESSIBLE MEETING INFORMATION 

EMBARCADERO ELEVATOR TO BE CLOSED - MAY 4, 2009 TO AUGUST 2009 

Please be advised that on Monday, May 4, 2009, BART will close the Embarcadero 
BART Station street-level elevator in order to replace the structure which houses 
the elevator entrance on the street level. The elevator will be shut down for 
approximately 3-1/2 months during this construction-until August 2009. People 
who rely on the elevators to enter and exit at Embarcadero should exit at 
Montgomery Station during this period. 

ALTERNATIVES TO EMBARCADERO: 

While the Embarcadero Street Elevator is closed, BART and Muni riders should exit the 
systems at Montgomery Street BART/Muni Station. 

The Montgomery Station elevator is located on Market and Sutter, approximately 3-1/2 
blocks from the location of the Embarcadero Station street elevator. If riders are unable 
to proceed from Montgomery under their own power, they can take any one of the 
following Muni lines which stop on Market Street near both Embarcadero and 
Montgomery: 

2 -- Clement 
7 - Haight 
21 - Hayes 
31 -- Balboa 

For information about the project or transit alternatives, contact the following: 

BART Transit Information 

(415) 989-BART / (925) 676-BART / (510) 465-BART 

TTY (510) 839-2220 

San Francisco 31 1 Customer Service Center 
31 1 / (415) 701-231 1 / TTY (415) 701-2323 

You can also visit BART online: www.bart.qov or www.sfmta.com . 

If you need additional transportation planning assistance or would like information about 
paratransit during this project, call BART Accessible Services at (510) 464-6184 or Muni 
Accessible Services at (415) 701-4485 / TTY (415) 701-4730. 



A081 12009 



FERRY BUILDING: 

The Port Commission Hearing Room is located on the second floor of the Ferry 
Building. The main public entrance is from the west (Embarcadero) side and is served 
by a bank of elevators adjacent to the historic staircase. Accessible public restrooms 
are on the first floor at the northeast end of the building as well as on the second floor 
across the lobby from the Port Commission Hearing Room. The main path of travel to 
the Port Commission Hearing Room is equipped with remote infrared signage (Talking 
Signs). The Port Commission Hearing Room is wheelchair accessible. Accessible 
seating for persons with disabilities (including those using wheelchairs) is available. The 
closest accessible BART and MUNI Metro station is Embarcadero located at Market & 
Spear Streets. Accessible MUNI lines serving the Ferry Building area are the F-Line, 9, 
31, 32 and 71. For more information about MUNI accessible services, call (415) 923- 
6142. The nearest accessible parking is provided in the following off-street pay lots: 

A) 3 spaces in the surface lot on the west side of the Embarcadero at Washington St. 

B) Hourly and valet parking in the Pier 3 lot. This lot is accessed through the Pier 3 
bulkhead building entrance on the east side of the Embarcadero. This lot is located 
on the pier deck; adjacent to the ferry boat Santa Rosa. 

Additional covered accessible off-street pay parking is available in the Golden Gateway 
Garage, which is bounded by Washington, Clay, Drumm and Battery Streets. Entrance 
is on Clay St. between Battery and Front Streets. There is no high-top van parking. 
Metered street parking is available on the Embarcadero, Washington, Folsom & Drumm 
Streets. 

PIER1: 

The Port's fully accessible offices are in the west end of Pier 1 . There are two public 
entrances; the main entrance on the west (Embarcadero), and the Port History walk 
entrance on the south apron. Each of these entrances is provided with an automatically 
operated door. Both entrances lead to the Bayside conference rooms. Accessible 
public restrooms, drinking fountains, payphone and TTY are on the first floor near the 
main entrance. The public spaces of the Port's offices are equipped with remote infrared 
signage (Talking Signs) identifying all primary entrances, paths of travel, meeting rooms 
and amenities. Accessible seating areas and assistive listening devices will be available 
in the Bayside Conference rooms. 



A08112009 



Accessible meeting information policy: 

In order to assist the City's efforts to accommodate persons with severe allergies, 
environmental illness, multiple chemical sensitivity or related disabilities, attendees at 
public meetings are reminded that other attendees may be sensitive to various chemical 
based products. Please help the City to accommodate these individuals. 



A sign language interpreter and alternative format copies of meeting agendas and other 
materials can be provided upon request made at least 72 hours in advance of any 
scheduled meeting. Contact Wendy Proctor, Port's ADA Coordinator, at 274-0592, the 
Port's TTY number is (415) 274-0587. 

Know Your Rights Under the Sunshine Ordinance: 

Government's duty is to serve the public, reaching its decisions in full view of the public. 
Commissions, boards, councils and other agencies of the City and County exist to 
conduct the people's business. This ordinance assures that deliberations are 
conducted before the people and that City operations are open to the people's review. 
For more information on your rights under the Sunshine Ordinance (Chapter 67 of the 
San Francisco Administrative Code) or to report a violation of the ordinance, contact 
Frank Darby by mail: Sunshine Ordinance Task Force, 1 Dr. Carlton B. Goodlett Place, 
Room 244, San Francisco CA 94102-4689; by phone at (415) 554-7724; by fax at (415) 
554-7854 or by email at sotf(a!sfqov.orq . Citizens interested in obtaining a free copy of 
the Sunshine Ordinance can request a copy from Mr. Darby or by printing Chapter 67 of 
the San Francisco Administrative Code on the Internet, at 
http://www.sfgov.org/sunshine. 

NOTICES 

Prohibition of Ringing of Sound Producing Devices: 

The ringing of and use of cell phones, pagers, and similar sound-producing electronic 
devices are prohibited at this meeting. Please be advised that the Chair may order the 
removal from the meeting room of any person(s) responsible for the ringing or use of a 
cell phone, pager, or other similar sound-producing electronic device. 

Lobbyist Registration and Reporting Reguirements: 

Individuals and entities that influence or attempt to influence local legislative or 
administrative action may be required by the San Francisco Lobbyist Ordinance (SF 
Campaign & Government Conduct Code Sections §2.100 - 2.160) to register and report 
lobbying activity. For more information about the Lobbyist Ordinance, please contact 
the San Francisco Ethics Commission at 30 Van Ness, Suite 3900, San Francisco, CA 
94102, phone (415) 581-2300 or fax (415) 581-2317; web site: www.sfgov.orq/ethics . 



A08112009 



TO: 



FROM: 




PORTe 



SAN FRANCISCO 

MEMORANDUM 

August 4, 2009 

MEMBERS, PORT COMMISSION 
Hon. Rodney Fong, President 
Hon. Stephanie Shal<ofsl<y, Vice President 
Hon. Michael Hardeman 
Hon. Ann Lazarus 

Susan Reynolds 

Deputy Director, Real Estat 





SUBJECT: Request approval of Fifth Ahci^ndment to Lease No. L-12540 with SF 
Recycling and Disposal, Inc. for Pier 96 near Cargo Way 

DIRECTOR'S RECOMMENDATION: Approve the Attached Resolution 



Introduction 

Pier 96 is home to Recycle Central and is operated by SF Recycling and Disposal, Inc. 
("SFR&D"), a wholly-owned subsidiary of Norcal Waste Systems, Inc. dba Recology, 
pursuant to Lease No. L-12540 (the "Lease"). This facility sorts and prepares for market 
the recyclable materials collected in blue bins citywide, as well as materials collected 
from commercial accounts. 

Port staff negotiated proposed amendments to Lease ("Fifth Amendment") as part of 
discussions with SFR&D related to a periodic base rent market adjustment ("Market 
Rent Adjustment") pursuant to the Lease. This report details the Fifth Amendment and 
provides background associated with the Market Rent Adjustment. 

Background 

The Port and SFR&D entered into Port Lease No. L-12540, dated January 22, 1998, for 
property located at Pier 96. The Lease was subsequently amended on four occasions; 
Appendix A contains a brief summary of these amendments. 



This Print Covers Calendar Item No. 8A 



T QF SAN FRANCISCQ- 



The Lease has a term of twenty-five years and provides for a market rate rent 
adjustment to the fair market rental value for similarly situated industrial Port maritime 
properties every five (5) years. 

Table 1 below provides an overview of Lease terms and current rent for Pier 96. 



Table 1: Lease L-12540 Major Terms and Current Rent 


Term 


Description 


Premises and Current Rent 
per Square Foot ("sf) 


Parcel A: 195,281 sf of Pier 96 shed space, outbuilding, loading 
dock and canopy space (current rent: $0.37/sf) 

Parcel B: 201 ,626 sf of paved yard space, including non- 
exclusive rail access (current rent: $0.13/sf) 


Use 


Mixed materials recycling facility, not to exceed 2,100 tons per day 


Current Rent 


$98,305.15/month or $1,1 79,661. 80/annually 


Wharfage 


$49.61 per container; 7,600 TEU requirement annually after 10'*^ 

year of Lease; Tenant may pay a fee ("Maritime Deficiency Fee") in 

lieu of shipping from Port maritime terminals. 

Tenant may request a waiver of half of the fee upon showing that 

there were no container slots available for shipment and the cost to 

transfer the containers by barge/other vessel would exceed the 

Maritime Deficiency Fee. 

Current annual Maritime Deficiency Fee: $626,41 1 .00. Half of 

Maritime Deficiency Fee: $313,205.50. 


Market Rent Adjustment 


Port may reset base rent every five years by establishing fair market 
rental value based on similarly situated industrial Port maritime 
properties. Tenant may appeal the Port's determination, subject first 
to negotiation between Port and Tenant and then to baseball 
arbitration if the parties cannot agree on fair market value. Under 
baseball arbitration, each party appoints an appraiser and develops 
its own appraisal instructions, which are not subject to arbitration or 
adjudication. If the difference between the parties' appraisals is too 
great, a third appraiser determines the new base rent by choosing 
the appraisal that the third appraiser finds best approximates Fair 
Market Rent. 


Early Termination 


Tenant may terminate early with a one year notice to the Port. 


Maintenance 


Tenant responsible for maintenance and repairs, including the 
substructure, subject to certain damage and destruction provisions. 


Effective Date 


August 1, 1998 


Termination Date 


July 31, 2023 



As part of SFR&D's mitigations adopted pursuant to the California Environmental 
Quality Act, on February 12, 2002, SFR&D paid $1,000,000 toward the construction of 
the Illinois Street Bridge. 

Market Rent Adjustment 

Pursuant to Lease Section 1.3B, the Port notified SFR&D on June 2, 2008 of its intent to 
exercise the Market Rent Adjustment, including a new market rent proposed by Port 
staff based on comparable Port maritime industrial leases. In response, SFR&D 



-2- 



submitted a draft appraisal with substantially lower maritime industrial values as 
comparables. SFR&D also noted that the Port's proposed rent for Pier 96 was 
substantially higher than that submitted by SFR&D to the Director of Public Works for 
purposes of its last refuse collection rate increase. As anticipated by the Lease, the 
parties negotiated a new rent. 

On or about May 15, 2009, Port staff and SFR&D reached agreement on a Market Rent 
Adjustment effective October 1 , 2008. The terms of the agreement are on file with the 
Deputy Director of Real Estate. The parties valued Pier 96 maritime shed space at 
$0.57/sf, based on SFR&D expenditures of $790,323 for the roof and walls. The parties 
valued adjacent paved open at $0.19/sf due to SFR&D expenditures of $185,207 for 
site paving repairs to repair settlement damage and periodic flooding that limits use of 
the subject land. Since these rates represent a combined 52% rent increase, rent 
increases are phased over time through December 31 , 2016, factoring in the time value 
of money. 

Fifth Amendment and Restatement of L-12540 

Pursuant to City law (Administrative Code Appendix 1), the rates for residential refuse 
collection services are set by the City at intervals largely determined by SFR&D. 
SFR&D submits a rate application projecting costs over a rate period and assuming a 
rate of return to the Director of Public Works, who convenes public hearings. The 
decision of the Director of Public Works can be appealed to a three member Rate 
Board. The last such rate increase that occurred was effective June 27, 2006; the rate 
is expected to remain in effect for five years (until 201 1), absent a new rate application 
by SFR&D. These rates include costs associated with Recycle Central at Pier 96, 
including Pier 96 rent. 

Over the course of negotiations, the parties discussed the timing of the City's refuse 
collection rates and Market Rent Adjustments pursuant to the Lease and recognized the 
mutual benefit of adjusting rents to market prior to Director of Public Works rate 
hearings. SFR&D could then supply actual, rather than projected. Pier 96 rents to the 
Director. 

In 2005, the Port stopped handling container traffic at Pier 80, although the facility 
retains the capacity to handle containers. Each time SFR&D has requested a waiver of 
one half of the Maritime Deficiency Fee, the Port's Maritime Division has approved the 
waiver request, due to a lack of container vessel activity to ship SFR&D's recyclable 
materials to Pacific Rim markets. During negotiations, SFR&D stated its desire for a 
more certain approach to the waiver of one half of the Maritime Deficiency Fee. 

Table 2 below sets forth the terms of the proposed Fifth Amendment. Port staff notes 
that these proposed terms do not relate to rent, use of the facility, the premises or term 
of use. 



Table 2: Fifth Amendment to Lease L-12540 


Term 


Description 


Schedule for Market Rent 
Adjustments 


Future Market Rent Adjustments will be adjusted to the fair market 
rental value for similarly situated industrial Port maritime properties, 
on the following dates: January 1, 2012, January 1, 2017 and 
January 1 , 2022. (Assumes the City's refuse collection rates will 
remain on a five-year schedule.) 


Tenant Request for Market 
Rent Adjustment 


Tenant may, no less than sixty (60) days prior to filing a Notice of 
Intent to File Application with the Department of Public Works as the 
first step in seeking a residential solid waste rate increase, request a 
Market Rent Adjustment. Port, in its sole discretion, may agree or 
decline to perform a Market Rent Adjustment. 


Maritime Deficiency Fee 


Port must waive one half of the Maritime Deficiency Fee when the 
Port is not served by one or more container shipping lines that move 
at least 10,000 TED Container Units per month, with at least four 
departures each month from the Port to destinations in Asia utilizing 
Port berths dredged to a depth of not less than 40 feet below mean 
lower low water. (Reflects the closure of Pier 80 as a container 
facility.) 


Early Termination 


Tenant may not exercise its early termination option until January 1, 
2012. 


Notice of Early Termination 


Within sixty (60) days from the date of Tenant's application for any 
land use or regulatory permit to facilitate Tenant's relocation from 
the Premises to another location. Tenant will provide Port with 
written notice of such application. Upon Tenant's delivery of such 
notice. Port may market the Premises to prospective future 
developers and/or tenants, and Tenant will afford Port reasonable 
access to the Premises for such purposes. 


City Requirements 


The Fifth Amendment incorporates all new City ordinances adopted 
since the last amendment. 


Southern Waterfront 
Beautification Policy 


Tenant's $1,000,000 contribution toward the construction of the 
Illinois Street Bridge constitutes compliance with the Southern 
Waterfront Beautification Policy for the purposes of this Fifth 
Amendment. 



If approved by the Port Commission, the Fifth Amendment will take effect only if the 
parties execute a companion letter agreement effectuating a Market Rent Adjustment 
effective October 1, 2008. 

Staff Recommendation 

Port staff recommends approval of the attached resolution. 

Prepared by: Brad Benson, Special Projects Manager 



Exhibit A: 
History of Lease No. L-12540 Lease Amendments 



Table 3: History of Amendments to Lease L-12540 


Amendment 


Date 


Terms Amended 


First Amendment 


June 30, 1998 


Commencement Date, Termination Date and Rent 
Commencement Date 


Second Amendment 


December 17, 1998 


25 Year Term, adding wharfage payments and 
mailing other changes 


Third Amendment 


July 9, 2001 


Premises, Base Rent and other provisions 


Fourth Amendment to 
and Restatement 


June 12,2002 


Permitted Uses, Base Rent and Security Deposit 
provisions, adding square footage to the Premises, 
revising certain maintenance obligations, and 
making other updates 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 



RESOLUTION NO. 09-41 

WHEREAS, Charter Section 4.1 14 grants to the Port Commission the authority and 
duty to use, conduct, operate, maintain, regulate and control the lands 
within the Port jurisdiction; and 

WHEREAS, Port and Tenant entered into Port Lease No. L-12540, dated January 22, 
1998 for that certain real property located at Pier 96 in the City and 
County of San Francisco, State of California, and subsequently entered 
a Second, Third and Fourth Amendment to and Restatement of Lease, 
the last dated June 12, 2002 (the "Lease"); and 

WHEREAS, the Lease has a term of twenty-five years (starting on August 1 , 1998 
and expiring on July 31 , 2023) and provides for a market rate rent 
adjustment to the fair market rental value for similarly situated industrial 
Port maritime properties ("Market Rent Adjustment") every five (5) years; 
and 

WHEREAS, on June 2, 2008, Port notified Tenant of its intent to exercise the Market 
Rent Adjustment and the parties each evaluated the value of the 
property based on then current market rates; and 

WHEREAS, on or about May 15, 2009, pursuant to Section 1 .3B of the Lease, Port 
staff and Tenant reached agreement on a Market Rent Adjustment 
effective October, 1, 2008 (Year 10 of the Lease); and 

WHEREAS, during negotiations, Port and Tenant have agreed to make other related 
revisions, comprised in a Fifth Amendment to the Lease (the "Fifth 
Amendment"), including provisions to: (i) accelerate the dates on which 
rent is adjusted to market rates and allow for flexibility in the timing of 
future market rent adjustments and realign the dates for cost of living 
increases to correspond with the market rate adjustments; (ii) correct a 
cross-reference error in the section regarding holdover period rent; (iii) 
delay Tenant's right to unilaterally terminate until January 1, 2012 and 
add an early notice provision; (iv) add circumstances under which Port 
must waive one-half (1/2) of Tenant's payment of the Maritime 
Deficiency Fee; and (v) add City requirements that were adopted 
subsequent to the effective date of the Fourth Amendment and 
Restatement of Lease; and 

WHEREAS, Tenant's February 1 2, 2002 payment of a One Million Dollar 

($1 ,000,000) Mitigation Fee as a contribution to the construction of the 
Illinois Street Bridge constitutes compliance with Port's Southern 
Waterfront Beautification Policy for purposes of this Fifth Amendment; 
now, therefore be it 

-6- 



RESOLVED, 



that the Port Commission approves the Fifth Amendment and 
authorizes the Executive Director or her designee to execute the Fifth 
Amendment, in substantially the form on file with the Port Commission 
Secretary; and, be it further 



RESOLVED, 



that the Port Commission authorizes the Executive Director to enter into 
any additions, amendments or other modifications to the Fifth 
Amendment that the Executive Director, in consultation with the City 
Attorney, determines are in the best interests of the Port, do not 
materially increase the obligations or liabilities of the City or Port, and 
are necessary or advisable to complete the transactions which the Fifth 
Amendment contemplates and effectuate the purpose and intent of this 
Resolution, such determination to be conclusively evidenced by the 
execution and delivery by the Executive Director of the Fifth 
Amendment, and any such amendments thereto; and, be it further 



RESOLVED, 



that the Fifth Amendment shall not become effective before the date on 
which the Port and Tenant execute a letter agreement effectuating the 
Market Rent Adjustment, a copy of which is on file with the Port 
Commission Secretary. 



/ hereby certify that the foregoing resolution was adopted by the Port 
Commission at its meeting of August 11, 2009. 



Secretary 



-7- 




PORTs 



SAN FRANCISCO 




MEMORANDUM 

August 6, 2009 

TO: MEMBERS, PORT COMMISSION 

Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Michael Hardeman 
Hon. Ann Lazarus 

FROM: Brad Benson 

Special Projects Manager 

SUBJECT: Request approval of Memorandum of Understanding between the San 
Francisco Public Utilities Commission and the Port regarding the North 
Shore Force Main Sewer Improvement Project including Seawall Lot 351 
located at Washington Street at Embarcadero 

DIRECTOR'S RECOMMENDATION: Approve Attached Resolution ^_^ 

BACKGROUND 

On May 26, 2009, the San Francisco Public Utilities Commission (SFPUC) Waste Water 
Enterprise staff provided an informational presentation to the Port Commission 
regarding the North Shore Force Main Improvement Project ("Project"), which will start 
construction in Fall 2009 (Exhibit 1). As proposed, the Project will reroute flow from a 
structurally deficient portion of the force main that runs between Washington Street and 
Howard Street along the Embarcadero to a new alignment along Drumm and Spear 
Streets in the financial district (Exhibit 2). The force main in the vicinity of Pier 1 
suffered localized failures on two occasions in 2008 that necessitated emergency 
repairs by SFPUC crews. The proposed rerouting of the force main will provide for 
system reliability in the vicinity of Ferry Plaza. 

While most of the project will take place off of Port property, the proposed design will 
make use of an existing combined sewer overflow structure that runs along Jackson 
Street and crosses Port property at Seawall Lot (SWL) 351 . Two subsurface vaults will 
be built in the sidewalk adjacent to SWL 351 to transition the existing force main which 
runs along the Embarcadero into a new alignment that runs west towards Drumm Street 
through the existing combined sewer overflow structure. Construction of these vaults 
will require minor excavation at SWL 351 and the adjacent sidewalk area. 

This Print Covers Calendar Item No. 8B 



T OF SAN FRANCISCO 



niRi 



Port staff has coordinated with the SFPUC to ensure that improvements in the vicinity of 
SWL 351 are designed and constructed in a manner that minimizes impacts to future 
development of SWL 351 . Furthermore, the Port will not incur any costs associated 
with the Project. These discussions are memorialized in the Memorandum of 
Understanding (MOU) presented today for Port Commission consideration. 

MEMORANDUM OF UNDERSTANDING 

Port and SFPUC staffs propose entering into an MOU for the North Shore Force Main 
Improvements project, included as Exhibit 3 to this report. The proposed MOU provides 
for the following: 

1 . Documentation of SFPUC's easement for the combined sewer overflow structure 
at SWL 351 , including the area to be occupied by the new sewer vault structures; 

2. Establishment of SFPUC's rights and obligations with respect to construction of 
improvements along the easement; 

3. Mitigation of temporary construction impacts associated with the Project; 

4. Documentation of SFPUC's long-term maintenance obligations for new and 
existing infrastructure on Port property in the vicinity of SWL 351 ; and 

5. The lease of the Port's Seawall Lot (SWL) 347S by the SFPUC at current market 
rates for purposes of construction laydown, for approximately 15 months. 

The Project will temporarily displace roughly one-third of the parl<ing spaces at SWL 
351 , which currently serves as the primary parking lot for the Ferry Building. SWL 
347S, the site proposed for construction laydown activities, is not currently leased. 

The MOU addresses the concerns highlighted in the May 20, 2009 staff report that the 
SFPUC minimize and mitigate parking impacts. The SFPUC has provided the following: 

• Initiating work in the vicinity of SWL 351 in January 2010 after the holiday 
season and in winter months when parking demand is lower; 

• Minimizing the footprint of the construction laydown area at SWL 351 and 
making use of SWL 347S for construction laydown; and 

• Funding of up to $50,000 for a parking shuttle that will service Saturday Farmers' 
Market patrons during the high season between May and October 2010. 

The SFPUC has negotiated an agreement with Equity Office Partners, the Ferry 
Building tenant, to secure access to SWL 351 and provide reimbursement for parking 
revenues lost due to the Project. 



COMMUNITY OUTREACH 

At the May 26, 2009 Port Commission meeting, one member of the public questioned 
the need for this repair, based largely on their interpretation that the project would 
displace the Golden Gate Tennis and Swim Club. The Project will not have this effect. 
SFPUC staff has conducted extensive community outreach for the Project including 
presenting at the Port's Northeast Waterfront Advisory Group (NEW AG) on April 1 , 
2009. NEWAG and the greater affected community support this project. 

TIME LINE 

The North Shore Force Main Replacement Project is currently out to bid. SFPUC staff 
anticipates going before the Public Utilities Commission to seek authorization for 
contract award and approval of the MOU with the Port on September 8, 2009. 



Date 


Milestone 


August 11,2009 


Port Commission Resolution approving Port/SFPUC MOU 


September 8, 2009 


SFPUC Commission contract award and approval of 
Port/SFPUC MOU 


October 2009 


Begin construction 


January 2010 


Project mobilization at SWL 351 


May 2010 


Initiate Saturday Parking Shuttle for Ferry Building Farmers' 
Market 


October 2010 


Construction complete. 



ENVIRONMENTAL REVIEW 

The SFPUC has obtained a determination from the Major Environmental Analysis 
division of the City Planning Department that the Project is statutorily exempt from 
review under the California Environmental Quality Act (CEQA). The Port Commission's 
approval of the MOU is not a discretionary action that is subject to environmental review 
under CEQA. 

RECOMMENDATION 

Port staff recommends the approval of the attached resolution authorizing the Port 
Executive Director to enter into a Memorandum of Understanding with the San 
Francisco Public Utilities Commission regarding the Project and consent to other 
actions required to replace the aging North Shore Force Main. 



Prepared by: 



Prepared for: 



John Mundy, Utility Specialist 
Kathleen Diohep, Project Manager 
Elliott Riley, Sr. Property Manager 

Ed Byrne, Chief Harbor Engineer 

Byron Rhett, Deputy Director, Planning and Development 

Susan Reynolds, Deputy Director, Real Estate 

-3- 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 09-42 



WHEREAS, Charter Section B3.581 empowers the Port Commission with the authority 
and duty to use, conduct, operate, maintain, manage, regulate and control 
the lands within Port jurisdiction; and 

WHEREAS, The Port owns an approximately 27,937 square foot parcel at Seawall Lot 
351 (SWL 351), located at Washington and The Embarcadero; and 

WHEREAS, The San Francisco Public Utilities Commission (SFPUC) proposes 

improvements to the North Shore Force Main sewer line on and in the 
vicinity of SWL 351 necessary to maintain the integrity of the sewer 
infrastructure and protect public health (the "Project"); and 

WHEREAS, The SFPUC has obtained a determination by the Major Environmental 
Analysis division of the Planning Department that the SFPUC's project is 
statutorily exempt from review under the California Environmental Quality 
Act, and the actions authorized under this resolution are in furtherance of 
the Project; and 

WHEREAS, SWL 351 is presently licensed by the Port to Ferry Building Investors, LLC 
("Port's Licensee"), pursuant to that certain Parking Agreement, dated as 
of April 10, 2001, as amended, to provide short-term parking to serve 
visitors to the waterfront; and 

WHEREAS, On May 12, 2009, the San Francisco Port Commission heard a 

presentation by the SFPUC Staff regarding the need for the Project and 
received public comment; and 

WHEREAS, Port Staff has negotiated with the SFPUC a Memorandum of 

Understanding (MOU) that includes terms and mitigations for construction 
on and around SWL 351 , and believes that the MOU ensures that the 
interests of the Port and the Port's Licensee are addressed; therefore be it 

RESOLVED, That the San Francisco Port Commission hereby authorizes the Port 

Executive Director to enter into a Memorandum of Understanding (MOU) 
with the San Francisco Public Utilities Commission regarding the Project 
consistent with the terms in the staff report accompanying this resolution 
and in substantially the form on file with the Port Commission Secretary, 
subject to approval by the City Attorney; and, be it further 



Resolution No. 09-42 
Page 2 



RESOLVED, That, except as provided in this Resolution, the Port Commission 

authorizes the Executive Director to enter into any additions, amendments 
or other modifications to the MOU that the Executive Director, in 
consultation with the City Attorney, determines are in the best interests of 
the Port, do not materially increase the obligations or liabilities of the Port, 
and are necessary or advisable to complete the transactions that the 
Agreement contemplates and effectuate the purpose and intent of this 
Resolution, such determination to be conclusively evidenced by the 
execution and delivery by the Executive Director of the MOU, and any 
such amendments thereto; and, be it further 

RESOLVED, That the San Francisco Port Commission hereby authorizes Port staff to 
consent to a Permit to Enter and Use Property between Port's Licensee 
and the SFPUC to allow the SFPUC access to SWL 351 for the Project 
consistent with the terms in the staff report accompanying this resolution, 
subject to concurrence of the City Attorney. 



/ hereby certify that the foregoing resolution was adopted by the Port 
Commission at its meeting of August 11, 2009. 



SECRETARY 
-5- 



EXHIBIT 1 



MEMORANDUM 



TO: 



May 20, 2009 

MEMBERS, PORT COMMISSION 
Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Kimberly Brandon 
Hon. Michael Hardeman 
Hon. Ann Lazarus 



FROM: Monique Moyer 

Executive Director 

SUBJECT: Informational presentation by San Francisco Public Utilities Commission 
staff on North Shore Force Main Sewer Improvement Project including 
Seawall Lot 351 located at Washington Street at Embarcadero. 

DIRECTOR'S RECOMMENDATION: Informational Only - No Action Required 

INTRODUCTION 

The San Francisco Public Utilities Commission (SFPUC) Waste Water Enterprise will 
begin construction of the North Shore Force Main ("force main") Improvement Project 
starting Fall 2009. Currently, the force main sewer runs along the Embarcadero 
Roadway between North Point Street and Channel Pump Station on Mission Creek. 
The proposed construction project will reroute flow from a structurally deficient portion of 
the force main between Washington Street and Howard Street away from the 
Embarcadero to a new alignment along Drumm and Spear Streets (see Attachment 1). 

The proposed project includes open trenching on Spear, Drumm and Howard Streets, 
and underground work in the Jackson Street right-of-way and crossing Market Street. 
Most of the project will take place off of Port property. The proposed design will make 
use of the existing combined sewer overflow structure that runs along Jackson Street 
and crosses Seawall Lot (SWL) 351 , reducing the need for excavation on Port property. 
Two subsurface vaults will be built in the sidewalk adjacent to SWL 351 to transition the 
existing force main from the Embarcadero into the combined sewer overflow structure. 
Construction of these vaults will require minor excavation at SWL 351 and the adjacent 
sidewalk area. The proposed project will be fully funded by SFPUC. 



This Print Covers Calendar Item No. 11 A 



Port staff is currently working with SFPUC to develop a Memorandum of Understanding 
(MOD) that will: 1 ) document SFPUC's easement for the combined sewer overflow 
structure at SWL 351 , including the area to be occupied by the new vault structures; 
2) define SFPUC's rights and obligations with respect to construction of improvements 
along the easement, and 3) memorialize SFPUC's long-term maintenance obligations 
for the easement. 

BACKGROUND 

The North Shore Force Main is a critical piece of SFPUC infrastructure that conveys 
sewage from Northeast San Francisco towards the Southeast Wastewater Treatment 
Plant in Bayview Hunters Point. Roughly a third of San Francisco's geographic area, 
including the entire Northeast Waterfront, and up to 375,000 people are served by this 
sewer. The force main in the vicinity of Pier 1 suffered localized failures on two 
occasions in 2008 which necessitated emergency repairs by SFPUC crews. 
Inspections performed by SFPUC staff after the repairs were completed revealed that a 
portion of the force main between Pier 1.5 and the Agricultural Building had deteriorated 
significantly, a situation that could result in catastrophic failure in the vicinity of the Ferry 
Building. 

Upon discovering the deteriorated condition of the force main, SFPUC staff immediately 
established a capital project for its replacement ("North Shore Force Main 
Improvements Project"). SFPUC proposes constructing a new force main that will 
reroute flows away from the Embarcadero and provide system redundancy in the 
vicinity of Ferry Plaza (see Attachment 1). Specific to Port property, two subsurface 
vaults would be constructed at SWL 351 along the northern and southern edge of an 
existing SFPUC combined sewer right-of-way. These vaults would be used to reroute 
flow from the existing line to the new line, and vice versa. Once the new portion of the 
force main is constructed and in service, the existing portion of the force main will be 
taken out of service for inspection and repair. 

SFPUC has coordinated with representatives from the Port to ensure that these 
infrastructure improvements are designed and constructed in a manner that minimizes 
Impacts to future development of SWL 351 . SWL 351 is currently the primary parking 
lot for the Ferry Building, with 80 striped spaces and valet capacity for approximately 
100 cars. Construction of the underground vaults needed to realign the force main will 
require use of SWL 351 for construction laydown space and could displace 
approximately 41 parking spaces over a period of eight to ten months. 

MOU BETWEEN SFPUC AND PORT 

Port staff has been working closely with the SFPUC since late 2008 to refine the project. 
The project design locates the vaults in the sidewalk areas and supports those vaults 
with piles to minimize impact on future redevelopment of SWL 351 . The PUC will also 
remove an abandoned SFPUC pipeline that currently crosses the SWL 351 
development footprint. To minimize the construction period impact on parking at SWL 
351 the Port has agreed to lease SWL 347 South to the SFPUC for construction lay 



down space. SWL 347 South is located at the intersection of Howard Street and the 
Embarcadero and is not currently leased. 

Port and SFPUC staffs are currently negotiating a Memorandum of Understanding 
(MOU) that will be presented to the Port Commission for approval at a subsequent 
meeting. The MOU will address the following issues: 

1 . Appropriate project review and permitting by Port staff 

2. Implementation of construction techniques that will minimize noise and other 
impacts to the neighboring community 

3. Assurances that the SFPUC will bear the costs and liabilities associated with this 
project. 

4. A requirement that the SFPUC contract with the Ferry Building tenant, Equity 
Office Properties (EOP), for access to SWL 351 during the project. 

5. Measures to reduce the impact of the loss of parking in the area on Saturday 
mornings. Such measures (likely a shuttle and promotion efforts) would be 
implemented in coordination with EOP. 

6. Documentation of the locations of the new vaults and existing SFPUC 
infrastructure on SWL 351 . 

7. SFPUC's confirmation that it has taken measures to limit negative impacts on 
potential future development of SWL 351 , and that such development has been 
considered in the design of the North Point Force Main Improvements Project. 

The MOU will be effective until such time the SFPUC sewer facilities are no longer 
required. At such time, the SFPUC shall take actions necessary to deactivate and 
remove the SFPUC sewer facilities as may be reasonably required by Port, and restore 
the area to its original condition. 

COMMUNITY OUTREACH 

On April 1 , 2009, SFPUC staff briefed the Northeast Waterfront Advisory Group about 
the project. Although there were questions, there was support for repairing the sewer 
line to avoid future breaks and emergency repairs. The SFPUC has also met with other 
stakeholders in the area including business and residential interests and developed a 
Fact Sheet describing the project for distribution to the local community (Attachment 2). 

NEXT STEPS 

Following this presentation, Port staff will complete its negotiation of the MOU with PUC. 
The SFPUC current schedule for the project is: 

• June 2009 SFPUC puts project out to bid 

• July 2009 Port Commission Resolution approving Port/SFPUC MOU 

• August 2009 SFPUC Commission awards contract and approves 

Port/SFPUC MOU 

• Sept. 2009 Begin Construction 

• Jan to Sept 2010 Projected Displacement of parking from SWL 351 

• October 2010 Complete Construction 

-3- 



RECOMMENDATION 

No action is requested at this time. Staff will return to the Port Commission to request 
authorization to enter into the MOU negotiated with the SFPUC. Thereafter SFPUC 
staff will provide periodic updates, as necessary to keep the Port and its stal<eholders 
informed of the work's progress. 



Prepared by: 



John Mundy, Utility Specialist 
Kathleen Diohep, Project Manager 
Elliott Riley, Sr. Property Manager 



Prepared for: 



Ed Byrne, Chief Harbor Engineer 

Byron Rhett, Deputy Director, Planning and Development 

Susan Reynolds, Deputy Director, Real Estate 



Attachments: 



Attachment 1 : 
Attachment 2: 



Aerial View of SFPUC North Shore Force Main Project Site 
Fact Sheet SFPUC North Shore Force Main Project Site 



-4- 



Attachment 1 

Aerial View 
SFPUC North Shore Force IVIain Project Site 



■5- 



Attachment 2 

Fact Sheet 
SFPUC North Shore Force Main Project 



-6- 



0^C 

£> 






Water 



GAVIN NEWSOM 

^MYOR 

ANN MOLLER CAEN 

PRESIDENT 

F.X. CROWLEY 

VICE PRESIDENT 

FRANCESCA VIETOR 

COMMISSIONER 

JULIET ELLIS 

COMMISSIONER 

ED HARRINGTON 

GENERAL MANAGER 




ATTACHMENT 2 
San Francisco public utilities commission 

1155 Market St., 11th Floor. San Francisco, CA 94103 • Tel. (415) 554-3155 • Fax (415) 554-3161 • TTY (415) 554.3488 

Sewer Repair and Replacement Program 

North Shore Force Main Sewer Improvement Project 

(Embarcadero, Drumm, Spear and Howard Streets, 

San Francisco) 

Revised Fact Sheet 
(May 2009) 

background: 

San Francisco's wastewater collection system is a combined system and consists of 
1 ,000 miles of sewers that transport sanitary flow and stormwater runoff. More than 
70% of the city's sewers are over 70 years old. Since the late 1970's, the San 
Francisco Public Utilities Commission (SFPUC) has been working on sewer 
improvement projects throughout the City and at our wastewater treatment plants 
with the ongoing Sewer Repair and Replacement (R&R) Program. There are usually 
dozens of these R&R projects happening at any given time throughout the city. Each 
of these R&R projects, are coordinated with the City's street paving program through 
the Department of Public Works (DPW). 

WHY DO WE NEED THIS PROJECT? 

The North Shore Force Main is an important sewer line that transports all sanitary 
sewage from the northeastern part of San Francisco to the Southeast Treatment 
Plant for treatment. In 2008, there were two emergency repairs on the existing force 
main, located on the Embarcadero, and the SFPUC determined that a portion of that 
existing pipeline is in need of rehabilitation. The existing pipeline is the only one 
transporting sanitary sewage from the northeastern part of the City, and before it can 
be taken out of service for repair or replacement, a redundant pipe needs to be 
constructed. 

The purpose of this project is to construct a new force main pipeline to divert sanitary 
sewage away from the portion of the force main that is susceptible to failure. Overall, 
this project will increase sewer system reliability in the area. 

WHERE WILL THIS PROJECT TAKE PLACE? 

• Sidewalk area of Embarcadero Street, adjacent to the Ferry Building Parking Lot 
(also known as SWL 351), between Washington Street and Broadway Street; 

• Closed Jackson Street right-of-way from Embarcadero to Drumm Street - 
trenchless/underground work 

• Drumm Street, from Jackson St. to Market Street 

• Market Street intersection, off Spear Street - trenchless/underground work 

• Spear Street, from Market Street to Howard Street 

• Howard Street, from Spear Street to Steuart Street 



Please refer to attached map for details. 



WHEN WILL CONSTRUCTION START? HOW LONG WILL IT LAST? 

This project is tentatively scheduled to start in Fall 2009, and will last approximately 
12 months. Rainy weather may increase the duration of construction because sewer 
work cannot take place during heavy rain. There will be no construction work during 
the holiday season (from Thanksgiving 2009 until January 2010). 

\Nork schedules will vary depending on the work location to reduce impact on 
transportation and surrounding community (businesses and residences). Once a 
Contractor is selected, a more detailed work schedule will be provided. 

PARKING 

The SFPUG is working closely with the Port of San Francisco and the San Francisco 
Municipal Transportation Agency to minimize the displacement of parking resources. 
To reduce the impact on the primary parking lot for the Ferry Building and Farmers 
Market, the SFPUG will work with the Port of San Francisco and assist with locating 
alternative parking resources in the area and closely monitor contractor activity to 
minimize the displacement of parking to the extent possible. 

WHAT TYPE OF CONSTRUCTION WORK SHOULD I EXPECT? 

A combination of trenchless (underground) work and open-cut trenching in various 
areas of the project alignment: 

• Open-cut trenching in sidewalk area on Embarcadero Street, adjacent to the 
Ferry Building Parking Lot, between Washington Street and Broadway Street; 

• Open-cut trenching along Drumm Street, Spear Street and Howard Street; and 

• Trenchless (underground) work on Jackson Street (between Embarcadero and 
Drumm Street), and on Market Street. 

WILL OUR SEWER SERVICE BE INTERRUPTED? 

Sewer service in the area will NOT be interrupted during construction. 

HOW IS THIS PROJECT FUNDED? 

This project is made possible through your wastewater service charges. These 
service charges also pay for capital improvement projects, the maintenance and 
operations of our two 24-hour wastewater treatment plants and over 1 ,000 miles of 
sewers. 

QUESTIONS? 

For public inquiries, contact Idil Bereket, San Francisco Public Utilities Commission 
(SFPUG), Communications, at ibereket(g)sfwater.orq or 41 5-554-0741. You can also 
call the main line at 415-554-3289 and ask for assistance. 

A detailed notice on worl( sctiedule, hours, street parking restrictions and road 
closures, as well as contact information during construction will be distributed 
throughout the work area prior to construction. "No parking" signs will be 
posted in advance if necessary. Driveway access will be available at all times 
during construction unless otherwise notified. 



To report sewer emergencies, clogged catch basins (storm drains) or street flooding, call San 
Francisco's 3-1-1 or visit the online self service portal at www, sfaov. ora/3 1 1 . 



MEMORANDUM OF UNDERSTANDING 



This MEMORANDUM OF UNDERSTANDING, dated for reference purposes only 
as of August 1 1 , 2009, is made and entered into by and between the SAN FRANCISCO 
PUBLIC UTILITIES COMMISSION, hereinafter called "SFPUC", and the SAN 
FRANCISCO PORT COMMISSION, hereinafter called "Port", both entities agencies of 
the CITY AND COUNTY OF SAN FRANCISCO. 

RECITALS 

A. Certain property located at the intersection of The Embarcadero and 
Washington Street commonly referred to as Seawall Lot 351 ("SWL-351") is under the 
jurisdiction of the Port. SWL-351 is presently licensed by the Port to Ferry Building 
Investors, LLC ("Port's Licensee"), pursuant to that certain Parking Agreement, dated as 
of April 10, 2001, as amended. 

B. The SFPUC presently maintains a sewer line which services northeast 
San Francisco known as the North Shore Force Main. A portion of the North Shore 
Force Main is to be relocated beneath the surface of SWL.-351 and adjacent property 
which is under the Port's jurisdiction (the "Subject Area") in the general location shown 
on the attached Exhibit A . The SFPUC intends to construct certain improvements to 
such sewer line which are necessary to maintain the integrity of the sewer infrastructure. 
The improvements will include the installation of new underground equipment and 
installations and removal of some existing equipment and installations. The proposed 
work is referred to by the SFPUC as the North Shore to Channel Force Main 
Improvement, and is referred to in this Memorandum of Understanding (this "MOU") as 
the "Project". 

C. The Port and the SFPUC now wish to enter into this MOU to set forth the 
conditions under which the SFPUC will construct the Project and access, occupy, 
operate and maintain the facilities in the Subject Area, and certain other matters relating 
to the Project set forth below. 

NOW, THEREFORE, IT IS AGREED AS FOLLOWS: 



AGREEMENT 

1) The Port hereby grants permission to the SFPUC and its agents and 
contractors (the "SFPUC Parties") to enter the Subject Area. 

2) The Port's permission to enter the Subject Area is granted only for 
purposes of accessing, constructing, operating, maintaining, repairing and replacing the 
SFPUC sewer facilities. 

3) Such permission to enter the Subject Area shall terminate in the event 
that the SFPUC elects to permanently terminate operation of the sewer infrastructure 
installed within the Subject Area. In such case, SFPUC shall take action to deactivate 
and remove the sewer lines within the Subject Area as may be reasonably required by 

Page 1 of 6 



Port, and restore the Subject Area to the condition existing prior to the removal of the 
sewer lines or as otherwise agreed by the Port and the SFPUC at that time. 

4) The SFPUC Parties shall not interfere with any Port structures or any 
commercial, industrial or maritime activities, including but not limited to, roads, railroads, 
and waterways and any operations thereon, or any operations of Port tenants, or access 
of Port tenants to their leased premises, except as are necessary to construct, maintain 
and repair the sewer facilities shown on Exhibit A . In particular, two-way vehicle traffic 
along The Embarcadero roadway shall be maintained throughout the Project. The 
SFPUC recognizes that interference by the SFPUC Parties with any of Port tenants' 
commercial, industrial or maritime activities may result in tenants filing damage claims 
against the SFPUC and the Port. The SFPUC agrees to hold the Port harmless and 
defend the Port from any such claims. The SFPUC will not settle any such claims 
without the concurrence of the Port. 

5) The SFPUC shall construct the Project in a manner that minimizes 
impact to future development of SWL-351 . 

6) The SFPUC shall obtain any and all federal, state, regional or local 
governmental approvals necessary for the Project. 

7) SFPUC shall require each contractor it hires to secure public liability 
insurance in an amount not less than five million dollars ($5,000,000) Combined Single 
Limit, including auto and contractuals, with endorsements naming the Port of San 
Francisco and its officers, agents, and employees as co-insured in a form acceptable to 
the City's Risk Manager. 

8) As part of the Project, the SFPUC shall remove the portion of an out- 
of-service 21" gravity sanitary sewer line crossing the Subject Area depicted on attached 
Exhibit A. 

9) Plans and specifications for the construction, maintenance, repair, 
additions, and modifications to the sewers located within the Subject Area shall be 
submitted to and approved by the Chief Harbor Engineer of the Port, as evidenced by 
the issuance of an Encroachment Permit. No work shall commence without approval of 
plans and specifications by the Port's Chief Harbor Engineer, which approval shall not 
be unreasonably withheld. The SFPUC agrees that the Port may impose reasonable 
conditions to its approval based on the nature of the work and the conditions in and 
under the Subject Area. The Port's approval or disapproval will be forthcoming without 
unreasonable delay after submission by the SFPUC of plans and specifications for 
review by the Port Engineering Division. The SFPUC may, however, make any repairs 
or changes under emergency conditions that are determined to be necessary by the 
SFPUC upon the oral approval of the Port's Chief Harbor Engineer or his designee. The 
SFPUC agrees to provide the Port with copies of as-built plans of any work performed 
on the sewer infrastructure on property under Port jurisdiction. 



10) The SFPUC shall, without expense to the Port, repair any damage to 
any property under Port jurisdiction, including property owned or controlled by Port 
tenants, caused by the construction, maintenance, repair, or operation of the sewer 
facilities. Where the construction, maintenance, repair or operation of the sewer 

Page 2 of 6 



requires opening, changing location, or interference with Port-owned facilities such as 
pipelines, streets, railroad tracks, utilities, structures, or other Port installations, the 
SFPUC shall, without expense to the Port, do whatever work is required to support, 
maintain, or relocate such installations in a nnanner that will cause the least interference 
with the usefulness of Port installations. 

11) The Port shall allow the SFPUC's contractor to lease SWL-347S, as 
shown on the attached Exhibit B, at current market rates for the construction duration of 
approximately 15 months, beginning no later than December 2009. 

12) The SFPUC shall, at its own expense, negotiate and execute an 
agreement with the Port's Licensee for the use of SWL-351 for the Project, including, 
without limitation, for storage of material and equipment, excavation, and installation of 
underground equipment. The Port shall not unreasonably withhold, condition or delay 
consent to the negotiated agreement between the SFPUC and the Port's Licensee for 
the use of SWL-351. 

1 3) In coordination with Port staff, the SFPUC shall provide up to $50,000 
to fund the cost of a parking shuttle for Saturday Farmers Market patrons from May 2010 
through October 2010. 

14) The SFPUC acknowledges the Port's intent to redevelop SWL- 351 , 
and agrees that the Port may erect or approve construction of permanent structures up 
to the boundaries of the sewer easement line shown in Exhibit A, provided that the 
sewer system is protected from damage and has surface access for routine operation 
and maintenance by the SFPUC Parties. 

15) The SFPUC shall perform pre-and post-construction settlement 
surveys along the length of The Embarcadero and, where the proposed improvements 
are to be installed within the Subject Area, and provide copies of survey reports to the 
Port Engineering Division upon their availability. 

16) The SFPUC shall bear the total cost of constructing, maintaining, 
repairing and operating the entire North Shore Force Main sewer facilities. 

17) Upon the completion of the Project, the SFPUC shall promptly return 
the surface of the Subject Area to its prior condition, including repaving and regrading 
any existing roadway as required. 

18) The SFPUC shall provide proper notification to the Port of its 
contractor's schedule, work with Port tenants to notify them of the schedule and 
accommodate their operations in a reasonable manner, and provide the Port with the 
opportunity to recommend reasonable modifications to the schedule or sequence of 
operations, to preserve Port tenant operations and minimize disruptions thereto. 

19) The SFPUC shall provide the Port a metes and bounds survey of the 
Subject Area, to include areas of SWL 351 currently occupied by combined sewer 
infrastructure. 

20) The SFPUC acknowledges the right of the Port, at its sole discretion, 
to transfer property rights and interest in the Subject Area to other public and private 

Page 3 of 6 



entities. If the Port transfers any interest in any portion of the Subject Area to a non-City 
entity, the Port shall provide such transferee or permittee with a copy of this MOU and 
require, as a condition precedent to any transfer agreement or permit, that the non-City 
entity grants the SFPUC the form of an easement or other access agreement to be 
recorded concurrently with the close of the transfer or permit. 



follows: 



20) All notices to be given pursuant to this MOU shall be addressed as 



If to Port, to: 



If to SFPUC, to: 



Chief Harbor Engineer 
Port of San Francisco 
Pier 1 
San Francisco, CA 94111 



General Manager 

1155 Market Street, lV^ Floor 

San Francisco, CA 94103 



and to: 



Assistant General Manager 
Wastewater Enterprise 
1155 Market Street, lV^ Floor 
San Francisco, CA 94103 



Page 4 of 6 



IN WITNESS THEREOF, the parties have executed the foregoing 
Memorandum of Understanding as of the day of , 2009. 



SAN FRANCISCO PUBLIC UTILITIES 
COMMISSION 



SAN FRANCISCO PORT COMMISSION 



By: 



TOMMY MOALA 
Assistant General Manager 
Wastewater Enterprise 



By: 



ED HARRINGTON 

General Manager 

San Francisco Public Utilities 

Commission 



By: 



MONIQUE MOVER 
Executive Director 
Port of San Francisco 



Reviewed: 



Reviewed: 



City Attorney 
DENNIS J. HERRERA 



City Attorney 
DENNIS J. HERRERA 



By: 



By: 



By: 

JOHN RODDY 
Deputy City Attorney 



By: 

JOANNE SAKAI 
Deputy City Attorney 



Page 5 of 6 



EXHIBIT A 

Site plan for Project within Subject Area 
(To be attached.) 



EXHIBIT B 

Seawall Lot 347-S 
(To be attached.) 




PORTo 



SAN FRANCISCO 

MEMORANDUM 

August 6, 2009 

TO: MEMBERS, PORT COMMISSION 

Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Michael Hardeman 
Hon. Ann Lazari 



rus 



FROM: Tina Olson X^/ /1 4 

Deputy Director, Finance and Administration 

SUBJECT: Request Approval of Fiscal Year 2009-1 Executive Director Salary 

DIRECTOR'S RECOMMENDATION: Approve Attached Resolution 

Charter Section B3. 581(h) grants the Port Commission the exclusive authority to set the 
compensation of the Port Executive Director. The Charter provides that the Executive 
Director's compensation shall not exceed the prevailing salaries paid to those holding 
similar positions in comparable maritime employment. 

Staff conducted a survey of the salaries of Port Directors in the eight major West Coast 
ports. Of the eight seaports surveyed, three have authority over both the seaport and the 
airport. The remaining five ports have jurisdiction over the seaport only. For the latter 
group, the average annual salary is $243,295. A listing of such salaries is attached hereto. 

As has been its practice, staff also surveyed the salaries paid to the directors of other 
enterprise departments and similar departments of the City and County of San Francisco, 
including the Airport, Public Utilities Commission, Department of Public Works, Health 
Department and the Municipal Transportation Agency. The average salary of those 
directors is $272,702. A listing of such salaries is attached hereto. 

Further, each of those directors is provided with a City vehicle and free parking. The Port's 
Executive Director declined the use of a Port vehicle. That vehicle was surplused and the 
proceeds were returned to the Port in August 2004. Additionally, commencing August 1, 
2005, the Port's Executive Director has paid, on a monthly basis, for parking at the Port for 
her private vehicle. 

Because of the Charter provision stating that the Port Executive Director's salary is set by 
the Port Commission, the Port Executive Director is subject neither to collective bargaining 

This Print Covers Calendar Item No. 8C 

C T OF SAN FRANCISCO '^^^^^^■P 

MiniiiiiiBMiiiii 



nor representation by an employee organization. Nearly all other department heads and 
the Mayor are represented by the Municipal Executives Association (MEA) and have their 
salaries set through the collective bargaining process. 

The Port Commission's past practice has been to set the benefits and working conditions 
of the Port Executive Director in accordance with the benefits and working conditions 
provided in the collective bargaining agreement between the City and County of San 
Francisco and MEA. 

Per MEA's current MOD with the City, managers represented by MEA are not scheduled to 
receive a salary increase for FY 2009-10. However, on June 30, 201 1 , MEA salaries are 
scheduled to increase by 2%. 

During the City's FY 2009-10 budget negotiations, MEA agreed to have their represented 
employees take the value of four (4) furlough days through waiving the pay for 
performance 1 .5% lump-sum payment otherwise due to be paid in October 2010. 
However, because the Port Executive Director position is not represented by MEA, the 
Port Executive Director has not received the annual lump-sum bonus enjoyed by MEA 
represented employees since the inception of the pay for performance program in October 
1 , 1998. As a result, there is no recommendation that the Port Executive Director receive a 
wage reduction in the equivalent of four furlough days as negotiated by MEA for their 
represented members. 

Additionally, MEA previously agreed to five unpaid furlough days in each fiscal year over a 
two fiscal year period in order to save jobs and preserve City services. Therefore in FY 
2008-09 and FY 2009-10, the equivalent of five unpaid furlough days is deducted from 
MEA represented employees' pay through the use of unpaid administrative leave, resulting 
in an approximate 2% wage reduction for each fiscal year. 

If the Port Executive Director's salary increases at the same rate as that of employees 
represented by MEA, her salary will not increase in FY 2009-10. However, the Executive 
Director will continue to take the five unpaid furloughs and the reduced salary of $234,1 13 
after the annual work furlough reduction. This salary does not exceed the average annual 
salary currently paid to Port Directors in other West Coast ports and conforms to the 
requirements of Charter Section B8.3581 . 

It is recommended, therefore, that the salary and benefits for the Port Executive Director 
be set this year in accordance with the salary and benefits adopted by the Port 
Commission for FY 2009-10 pursuant to the terms of the collective bargaining agreement 
between the executive management bargaining group represented by the Municipal 
Executives Association. The proposed salary conforms to the salary setting parameters 
set in Charter Section B3.581. 

Prepared by: Lavena Holmes-Williams 

Human Resources Manager 

For: Tina Olson, Deputy Director 

Finance & Administration 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 09-43 



WHEREAS. 

WHEREAS, 

WHEREAS, 
WHEREAS, 
WHEREAS, 



RESOLVED, 
RESOLVED, 

RESOLVED, 



Section B3. 581(h) of the Charter grants the Port Commission the exclusive 
authority to set the compensation (salary and benefits) of the Port 
Executive Director; and 

Section B3. 581(h) of the Charter provides that the compensation of the 
Port Executive Director shall not exceed prevailing salaries paid to those 
holding similar positions in comparable maritime employment; and 

a survey of salaries paid to Port Directors in the major west coast seaports 
indicated that the current average compensation is $243,295; and 

a survey of City department heads in similar enterprise departments 
indicated that the average salary as of July 1 , 2009 is $272,702; and 

it has been the practice of the Port Commission to establish benefits and 
working conditions for the Port Executive Director in accordance with the 
benefits and working conditions provided in the collective bargaining 
agreement between the City and the Municipal Executives Association; 
now, therefore be it 

that the salary of the Port Executive Director for Fiscal Year 2009-10 will 
not increase; and, be it further 

that the Port Executive Director will take 39 hours of unpaid administrative 
leave over FY 2009-10 in accordance with the Municipal Executives 
Association practices; and, be it further 

that the benefits and working conditions provided to the Port Executive 
Director in Fiscal Year 2009-10 will be the same as those provided to 
employees represented by the Municipal Executives Association in Fiscal 
Year 2009-10. 



/ hereby certify that the foregoing resolution was adopted by the San Francisco Port 
Commission at its meeting of August 11, 2009. 



Secretary 



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E 



PORT-- 

SAN FRANCISCO 



TO: 



FROM: 



MEMORANDUM 

August 6, 2009 

MEMBERS, PORT COMMISSION 
Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Michael Hardeman 
Hon. Ann Lazarus 

Sidonie Sansom \\ V^ "^- 

Director, Homeland Security 



SUBJECT: Request authorization to accept and expend $5,771 ,340 in Proposition 1B 
grant funds from the California Office of Homeland Security for security 
improvements. 

DIRECTOR'S RECOMMENDATION: Approve Attached Resolution 

Funding Overview 

The State of California Highway Safety, Traffic Reduction, Air Quality, and Port Security 
Bond Act of 2006 (the "Bond Act"), approved by voters in 2006 as Proposition 1B, 
authorized the issuance of $19,925,000,000 in general obligation bonds. Section 
8879.23(c)(3) directs that $100 million of those funds be made available to issue grants for 
port and maritime security projects. Senate Bill (SB) 88, which implements the funding 
provisions in the Bond Act, was signed by the Governor and chaptered into law on August 
24, 2007. The legislature appropriated $60 million of the California Port and Maritime 
Security Grant Program funds in FY 2008, of which the Port has been awarded 
$5,771 ,340. In FY 2007, $40 million was appropriated, of which the Port received 
$3,117,512. 

During the past year, Port staff has collaborated closely with the other major Bay Area 
ports (Oakland, Richmond, and Stockton), other maritime stakeholders, and the Coast 
Guard to improve maritime security throughout the region. The 2007 federal Department 
of Homeland Security (DHS) grant funds successfully sought by the Port provide funds to 
improve security both within the Port of San Francisco, and on a regional basis. Past 
projects funded by federal and state grants include a Security and Vulnerability 
Assessment, Emergency Operations Plan, Physical Security Plan, security upgrades to 
the Pier 35 Cruise Ship Terminal and Pier 80, high security fencing, security lighting, and 
video surveillance equipment. 

This Print Covers Calendar Item No. 8D 



) ■ OF SAN FRANCISCO 



mm 



mmm 



The Port's Grant Application 

Port staff has been awarded the following grant funds from the State of California, under 
the 2008 California Port and Maritime Security Grant Program (PSGP): 

• Port-Wide Access Control and Fiber Optic Security Network - $1,700,000 

consisting of a fiber-optic network and access control equipment to 
approximately 20 Port facilities. The Port does not currently have an 
integrated access control system. This system will improve perimeter 
security and increase domain awareness through information-sharing 
with partners that provide layered security to the Port. Project costs 
are fully funded by the 2008 California Port and Maritime Security 
Grant Program grant. 

• Funding for Design of the Joint Operations and Security Center $1 ,865,000 
(JOS) Design - to complete schematic design services, including 

spatial requirements; mechanical and electrical loads for 
communications; computer and emergency equipment; as well as 
construction documents. The JOS will co-locate the San Francisco 
Police Department (SFPD) Marine Unit, SFPD Dive Team, Port's 
Hyde Street Harbormaster and San Francisco Fire Department 
(SFFD) fast response crews, include a fully equipped dive locker 
for joint SFPD, SFFD and Port dive team use, provide space for 
a security monitoring station, and house the Port's Alternate 
Department Operations Center (DOC). Project costs are fully 
funded by the 2008 California Port and Maritime Security Grant 
Program grant. 

• Building Occupancy and Resumption Program (BORP) $ 175,000 
Enrollment - to provide the 25% match for funding requested through 

the Department of Homeland Security (DHS) 2007 Supplemental PSGP. 
Total BORP Enrollment project costs are $700,000. The Area Maritime 
Security Committee recommended that FEMA approve the Port's 
application for DHS 2007 Supplemental PSGP funds; in the event FEMA 
does not approve the Port's request, Port staff can use this funding to 
enroll a smaller number of Port facilities in BORP. This project will increase 
Port resiliency efforts by significantly reducing the resumption-of-use time 
for Port facilities following a disaster. The BORP program allows building 
owners to obtain pre-certification for private post-disaster inspection of 
enrolled facilities by qualified, licensed engineers. Due to the extreme 
demands placed on Port Engineering staff and City building inspectors 
immediately following a major seismic event, resumption-of-use of Port 
buildings could take months, even if no substantial damage had occurred 
to them. Enrolling critical Port facilities in BORP will dramatically reduce 
the resumption-of-use time for Port facilities following an event. 

• High Security Fencing Project - to provide the 25% match for $ 125,000 
funding requested through the Department of Homeland Security 



(DHS) 2007 Supplemental PSGP. Total High Security Fencing project 
costs, for this phase of fencing, are $500,000. The Area Maritime 
Security Committee recommended that FEMA approve the Port's 
application for DHS 2007 Supplemental PSGP funds; in the event 
FEMA does not approve the Port's request. Port staff can use this 
funding to install high security fencing at a smaller number of Port 
facilities. This project will continue installation of the high security 
fencing on Port property. This project, in conjunction with other 
perimeter hardening projects, will reduce the risl< of Port property being 
used to stage terrorist attacks and will deter criminal activity on Port 
property. $125,000 

Pier 50 Emergency Power Project - to provide the 25% match for $ 250,000 

funding requested through the Department of Homeland Security 
(DHS) 2007 Supplemental PSGP. Total Pier 50 Emergency Power 
project costs are $1 ,000,000. The Area Maritime Security Committee 
recommended that FEMA approve the Port's application for DHS 2007 
Supplemental PSGP funds; in the event FEMA does not approve the 
Port's request, Port staff can use this funding to complete a portion of 
the project and seel< additional grant funding from other sources. This 
project will provide the Port of San Francisco Maintenance Division, 
essential to the Port's response and recovery operations following a 
natural or human-caused disaster, with emergency power sufficient to 
run critical equipment in the Division's 24 shops and second deck 
conference room. If Pier 1 is damaged and the Port's DOC rendered 
unusable. Port DOC operations will shift to the Pier 50 conference 
room. From that location. Port staff will direct emergency response 
activities throughout the Port, as well as provide personnel, supplies 
and facilities to support citywide disaster response activities. 

Type 1 Fireboat/CBRNE (Chemical, Biological Radiological, $ 425,000 

Nuclear and Explosive) All Hazards Response Vessel for San 
Francisco Fire Department (SFFD) - to provide 6% % of the 25% 

match for funding requested through the Department of Homeland 
Security (DHS) 2007 Supplemental PSGP. SFFD is seeking a waiver 
from the Secretary of the Department of Homeland Security for the 
remaining 18^/i % match. The purpose of this investment is to 
enhance the capability of the Fire Department to provide rapid 
waterborne emergency medical service, Search & Rescue, prevent & 
respond to waterborne acts of terrorism, natural & human-caused 
disasters, environmental mishaps & other maritime threats throughout 
the Greater Bay Area. This will be accomplished though replacement 
of a 50+ year old single mission vessel with an enhanced Type 1 
Fireboat/CBRNE response watercraft. The SFFD is currently the only 
fire department in the region providing full-time Type 1 firefighting 
capabilities & ail-hazards waterside response services. 



-3- 



• Dive Equipment for San Francisco Police Department (SFPD) $ 125,000 
Dive Team - Project costs are fully funded by the 2008 California Port 

and Maritime Security Grant Program grant. This investment will 
strengthen the SFPD Dive Team's CBRNE (Chemical, Biological, 
Radiological, Nuclear, and Explosive) response capability, as well as 
improve their ability to respond to natural or human-caused disasters 
in the waters off San Francisco. The SFPD Dive Team is the primary 
response team to underwater incidents with a criminal or terrorist 
nexus at the Port. This project includes diver decontamination 
equipment, diver surface supply system upgrades, diver training for 
CBRNE events and devices, and PPE (Personal Protective 
Equipment) upgrades. 

• CBRNE Prevention and Response Vessels for SFPD Marine Unit - $1,106,340 

Project costs are fully funded by the 2008 California Port and Maritime 
Security Grant Program grant. To adequately patrol the San Francisco 
waterfront, maintain its readiness posture, and to increase its detection 
capabilities, the Marine Unit needs to replace two aging rigid hull 
inflatable boats - which have exceeded their service life and are not 
equipped for heavy weather, night or low visibility operations - with two 
CBRNE-capable all-weather vessels. Additional equipment for use 
aboard the replacement vessels, as well as on the Marine Unit's 47' 
patrol vessel include upgrades to the Marine Unit's existing sonar unit, 
side scan sonar, night vision systems, a multifunction navigation 
display, a floating docking system, upgrades to existing radar & 
electronic/navigational systems & level B exposure suits. 

TOTAL $5.771.340 

Unlike the federal DHS grant funds, no matching funds are required for projects requested 
through this program. The grant performance period will end on March 31 , 201 1 . 

Port Commission Action 

Port staff seek Port Commission authorization for the Executive Director to accept and 
expend Proposition IB grant funds from the California Department of Homeland Security 
for port security improvements. 



Prepared by: Sidonie Sansom 

Director of Homeland Security 

Daley Dunham 

Principal Administrative Analyst 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 

RESOLUTION NO. 09-44 



WHEREAS. 



WHEREAS. 

WHEREAS. 
WHEREAS. 



RESOLVED, 



RESOLVED. 



The State of California Highway Safety, Traffic Reduction, Air Quality, and 
Port Security Bond Act of 2006 (the "Bond Act"), approved by voters in 
2006 as Proposition 1B, authorized the issuance of $19,925,000,000 in 
general obligation bonds. Section 8879.23(c)(3) directs that $100 million of 
those funds be made available to issue grants for port and maritime 
security projects; and 

Senate Bill (SB) 88, which implements the funding provisions in the Bond 
Act. was signed by the Governor and chaptered into law on Aug 24, 2007; 
and 

The Port applied to the California Office of Homeland Security (OHS) for 
grant funding under OHS' FY 2008 Port Security Grant program; and 

On June 30. 2009 OHS awarded the Port $5,771 ,340 for various security 
upgrades, including access controls and fiber optics, building design 
funding. Building Occupancy Resumption Program enrollment, security 
fencing emergency power and funds for security projects being 
spearheaded by the San Francisco Police and Fire Departments; now, 
therefore, be it 

That this Port Commission hereby authorizes the Executive Director to 
seek Board of Supervisors approval to accept and expend the grant award; 
and. be it further 

That this Port Commission hereby authorizes the Executive Director or her 
designee to execute for and on behalf of the named applicant, a public 
entity established under the laws of the State of California, any documents 
necessary for the purpose of obtaining federal financial assistance 
provided by the federal Department of Homeland Security and sub-granted 
through the State of California, including any extensions, augmentations or 
amendments to those grant documents. 



/ hereby certify that the foregoing resolution was adopted by the Port Commission at 
its meeting of August 11, 2009. 



Secretary 



-5- 



TO: 



i 



PORTof- 

SAN FRANCISCO 



MEMORANDUM 



August 6, 2009 



MEMBERS, PORT COMMISSION 
Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Michael Hardeman 
Hon. Ann Lazactis 



FROM: 





Tina Olson ^/^4 

Deputy Director, Finance and Administration 



SUBJECT: Request Approval of the Port's Revised Annual Operating and Capital 
Budgets for Fiscal Year 2009-10 

DIRECTOR'S RECOMMENDATION: Approve the revised Annual Operating and 
Capital Budgets for Fiscal Year 2009-10 



The purpose of this item is to request Port Commission approval of the Port's revised 
Fiscal Year 2009-10 operating and capital budgets. Both budgets have changed since 
the Port Commission's review and approval on February 24, 2009 as a result of Mayor 
Gavin Newsom's Office and Board of Supervisors' review as well as certain changes 
proposed by Port staff. Material changes are discussed separately below. 

The proposed Fiscal Year 2009-10 overall budget approved by the Port Commission in 
February 2009 and subsequently amended and approved by the Mayor and Board of 
Supervisors Budget Committee is summarized as follows: 



This Print Covers Calendar Item No. 9A 



SAN FRANCISCO 



FAX 415 274 0528 





Budget 


Budget 








FY 2009/10 


FY 2009/10 








Port 


iVIayor & 


Increase / 






Commission 


BOS 


Decrease 






Approved 


Approved 


Amount 


Percent 


Sources 










Estimated Fund Balance 


$16,722,692 


$16,722,692 







Revenue 


63,376,800 


63,876,800 


$500,000 


0.78% 


Interest Earnings Restricted 










for Capital Projects 





1,622,880 


1,622,880 


100% 


GO Bonds 


13.557,362 


13.557.362 







Total Sources 


$93,656,854 


$95,779,734 


2.122.880 


2,27% 


Uses 










Operating Expense 


$59,533,349 


$59,477,543 


($35,806) 


-0.06% 


Annual Projects 


4,156,683 


4,213,126 


$56,443 


1.36% 


Capital Appropriations 


21,035,062 


23,157,942 


2,122,880 


10.09% 


Operating Reserve 


8.931.760 


8.931.123 


($637) 


-0.007% 


Total Uses 


$93,656,854 


$95,779,734 


2.122.880 


2.27% 


Operating Reserve as a 










Percent of Operating 










Expenses 


15% 


15% 







As described above, since February 2009, the Port's operating budget has decreased 
by $35,806 or 0.06%, annual projects have increased by $56,443 or 1 .36%, the capital 
budget has increased by $2.1 million or 10.09%, and the Port's operating reserve has 
decreased by $10,637 or -0.007% but is still 15% of the Port's operating expenses as 
required by the Port's Operating Reserve Policy adopted by the Port Commission in 
February 2008. 

Each of the substantive changes to the Port's FY 2009-10 budget since the Port 
Commission approved it in February 2009 is described in more detail below. 

Revenue 

The proposed revenue budget of $63.9 million for FY 2009-10 is $500,000 greater than 
that which the Port Commission approved in February 2009. The $500,000 represents 
a projected increase in revenues associated with new management agreements 
anticipated for the various parking lots on the northern seawall lots, including the 
Triangle Parking Lot in Fisherman's Wharf. The $500,000 is appropriated to the Taylor 
Street Improvement project for which the Department of Public Works (DPW) recently 
issued bid requests. After DPW completed the design, the engineer's estimate 
indicated a $500,000 shortfall for the Port's portion of the project. 



-2- 



In addition, the revised revenue budget includes $1 ,622,880 in interest earnings 
associated with the $20 million the Port received from the sale of the Watermark 
Condominiums located at Bryant Street and The Embarcadero that is allocated to the 
Cruise Terminal project. The $1,622,880 is also appropriated to the Cruise Terminal 
project to fund the planning and design phase. 

Operating Budget 

The proposed FY 2009-10 operating budget including annual projects of approximately 
$63.7 million is a $637 or 0.001% percent increase from the budget approved by the 
Port Commission in February 2009. The expense items that changed between 
February 2009 when the Commission approved the budget and that approved by the 
Mayor and the Board of Supervisors Budget Committee are as follows: 





Budget 


Budget 


Increase / (D 


ecrease) 




2008/09 


2009/10 


Amount 


Percent 


Salaries & Benefits 


$28,534,639 


$28,110,910 


($423,729) 


-1.48% 


City-wide Overhead 


538,550 


261,219 


(277,331) 


-51.50% 


Other Current Expenses 


8,860,518 


8,654,886 


(205,632) 


-2.32% 


Materials & Supplies 


1,482,246 


1,449,659 


(32,587) 


-2.20% 


Fixed Charges 


632,187 


632,187 





0% 


Capital Outlay (Equipment) 


254,038 


242,982 


(11,056) 


-4.35% 


Annual Projects 


4,156,683 


4,213,126 


56,443 


1.36% 


Debt Service 


4,702,720 


4,702,760 


40 


0% 


ADM - Insurance & Risk 


1,890,033 


1,890,033 





0% 


City Attorney - Legal 










Services 


2,554,650 


2,554,650 





0% 


Fire Protection Services 


2,736,582 


2,775,131 


38,549 


1.41% 


DHR- Workers 










Compensation 


826,811 


826,811 





0% 


PUC - Light, Heat & Power 


1,656,275 


1,656,275 





0% 


All Other City Departments 


4,449,112 


5,449,052 


999,940 


22.48% 


Interdepartmental Recovery 


(169,000) 


(313,000) 


(144,000) 


85.20% 


Revenue Transfer Out - 










DPT 


583.989 


583,989 





0% 


Total Expenses 


$63,690,033 


$63,690,670 


$637 


0.001% 



The major changes since February 2009 are in the line items for Salaries and Fringe 
Benefits, City-wide Overhead, Other Current Expenses, Materials and Supplies, 
Equipment, Annual Projects, Fire Protection Services, All Other City Departments, and 
Interdepartmental Recovery. Each of these is described in more detail below. 

• Salaries and Mandatory Fringe Benefits decreased by $423,729 or 1 .48% which 
reflects the following five vacant position reductions that the Board of Supervisors 
made to the Port's budget: 



• 



• 



Deleted Vacant Positions 

(1) Electrician 
(1) Plumber 

(1) Truck Driver 

(2) General Laborer 

The Port added these positions in the FY 2008-09 budget but did not fill them due to 
concerns whether the Port's revenues would decline as a result of the economic 
downturn. The Board of Supervisors' policy during its review of the FY 2009-10 
budget was to cut vacant positions. These positions were budgeted at less than .25 
full time equivalent (FTE). As such the total cut associated with deleting these 
positions was $52,533. 

None of these position deletions resulted in a lay-off. 

Other Adiustments to Salaries and Mandatory Fringe Benefits 

Several of the City's employee unions agreed to salary or other compensation 
reductions that resulted in $371,196 salary and fringe benefit savings to the Port. 

The Port's share of City-wide Overhead or "COWCAP" has decreased by 
$277,331 or 51.5% since Port Commission approval in February 2009 based on the 
City's COWCAP calculation that was issued after the Port Commission approved 
the Port's budget. 

The Board of Supervisors cut a total of $249,275 from Other Current Expenses, 
Materials and Supplies and Capital Outlay (Equipment) based on the Port's FY 
2008-09 actual expenditures. We concurred with these reductions. 

Payment to All Other Departments has increased by $999,940 or 22.48% primarily 
as the result of Mayor Gavin Newsom's Office's request that the Port purchase 
additional inter-departmental services. The Port agreed to purchase services from 
the following City departments: 

Department of City Planning - increased funding by $476,816 to cover $342,21 1 
in CEQA fees related to the Port's upcoming revenue bond funded projects and 
$134,605 to fund the balance required for the Northeast Seawall Lot Planning study. 
We expect to reimburse the $342,21 1 in CEQA fees with the proceeds from the Port 
revenue bond we plan on issuing this fall which will result in an operating reserve of 
$9,263,334 or 15.6%. 

Recreation and Park Department - increased funding by $300,000 to fund 
Recreation and Park Department Planning Division staff assistance with the Port's 
Blue-Greenway project in the southern waterfront as well as permitting efforts 
related to the Port's General Obligation bond and revenue bond funded projects. 
We also expect Recreation and Park Department Arborist staff help with the Port's 
tree maintenance efforts. 



Department of Technology - increased funding by $90,000 to help fund the Port's 
Geographic Information System (GIS) mapping efforts. 

General City Responsibility - increased funding by $60,000 to provide the 
required match to the grant funds the City is receiving related to the 2010 Golden 
Guardian emergency response exercise that will take place on Port property. 

MTA - increased by $40,000 to fund increased maintenance, service, and collection 
costs associated with the new paystations we recently installed to replace the Port's 
single space parking meters. 

The remaining $33,124 is related to miscellaneous increases to a few work-orders 
that the Controller's Office made to balance the City's work-order accounts. 

In addition, the Fire Department's Port funded budget increased by $38,549 to 
cover wage and fringe benefit increases. 

Interdepartmental Recovery 

The Controller's Office increased the Port's interdepartmental recovery by $144,000 
which is the projected revenues the Port would receive from the City's recently enacted 
Cigarette Butt Fee. The Cigarette Butt Fee is a $0.20 per pack of cigarettes fee that the 
City will charge to offset the cost to clean and dispose of cigarette butt litter. The 
Department of the Environment will collect the fee revenue and distribute it to the 
affected City Departments through interdepartmental recoveries. It should be noted that 
it is unclear whether the City will successfully collect this fee in FY 2009-10 due to 
potential litigation from the tobacco industry. 

Annual Projects 

Annual Projects increased by $56,443 to $4,213,126 as a result of the following 
adjustments to the Port's project appropriations: 

Proiect Adiusted Amount 

Stormwater Pollution Control ($75,000) 

Reduction reflects prior year actual expenses 

Wharf J-10 Monitoring (50,000) 

Reduction reflects prior year actual expenses 

ICS Training (25,000) 

Reduction reflects the accurate cost of 
the training program. 

BART Retrofit Proiect (20,000) 

Reduction reflects the Port's reduced scope 
of work related to this project. 



Hazardous Material Abatement (73,557) 

Reduced funding in the annual project and moved 
the budget to a Department of Public Works (DPW) 
work-order. The Port uses DPW's as-needed contractors 
to provide hazardous material abatement work. 

Employment Training Program 300.000 

The Board of Supervisors added back $300,000 to 
the Port's budget to provide employment training programs. 
The $300,000 is on reserve at the Board of Supervisors' Budget 
Committee. Port staff are developing a proposal for an employment 
training program that we will submit to the Port Commission and 
Board of Supervisors' Budget Committee in September 2009 
for review and approval. 

Total Annual Project Adjustments $56,443 

Capital Budget Changes 

As described under the Revenue section of this report. Mayor Gavin Newsom's Office 
increased the Taylor Street project appropriation by $500,000 as a result of DPW's 
more recent and accurate cost estimates completed in June 2009 and for which bids 
are due on August 12, 2009. In addition, Mayor Gavin Newsom's Office appropriated 
$1,622,880 in interest earnings associated with the $20 million the Port received from 
the sale of the Watermark Condominiums to the Cruise Terminal project to help fund 
the planning and design phase. 

Summary 

The Port's current FY 2009-10 budget is different from that which the Port Commission 
approved in February 2009. Some of the amendments resulted from requests made by 
Mayor Gavin Newsom's Office to fund services of other City departments that we 
funded through (1) salary and fringe benefit savings from wage and other compensation 
concessions the Mayor's Office negotiated with the City's labor unions, (2) reduction in 
the Port's contribution to COWCAP, and (3) the allocation of the Port's portion of the 
City's new Cigarette Butt fee revenues. The remaining changes were the result of 
Board of Supervisors' cuts to miscellaneous budget categories and using the savings to 
create a $300,000 employment training program at the Port. Fortunately, the Port 
needs the additional other City department services to advance its capital program and 
provide other important services. In addition, we believe we can develop an 
employment program that provides the Port with additional needed assistance while 
providing job opportunities during this difficult economic time. Finally, we preserved the 
Port's 15% operating reserve that we will increase to 15.6% when we reimburse the 
$342,21 1 in CEQA fees funded through the Port's work-order to the Department of City 
Planning with Port revenue bond proceeds this fall. 



Prepared by: Tina Olson, Deputy Director 
Finance and Administration 



-6- 



PORT COMMISSION 
CITY AND COUNTY OF SAN FRANCISCO 



RESOLUTION NO. 09-45 



WHEREAS, 
WHEREAS, 

WHEREAS, 

WHEREAS, 
WHEREAS, 

WHEREAS, 
RESOLVED, 



Port Commission staff has developed the proposed Fiscal Year 2009-10 
Operating and Capital Budgets; and 

The proposed Operating Budget includes projected revenues of 
$63,690,670; and 

The proposed Operating Budget includes projected expenses of 
$59,477,543 and annual projects of $4,213,126; and 

The proposed Capital Budget is $23,157,942; and 

The proposed Operating Reserve is $8,931,123 or 15% of the Port's 
operating expenses; and 

Mayor Gavin Newsom and the Board of Supervisors Budget Committee 
approved the Port's FY 2009-10 Operating and Capital Budgets; now 
therefore, be it 

That the Port Commission hereby approves the revised Fiscal 
Year 2009-10 Operating and Capital Budgets as presented by staff. 



I hereby certify that the foregoing resolution was adopted by the Port 
Commission at its meeting of August 11, 2009. 



Secretary 



_^L 



TO: 



"PORT°L- 

SAN FRANCISCO 

MEMORANDUM 

August 6, 2009 

MEMBERS, PORT COMMISSION 
Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Michael Hardeman 
Hon. Ann Lazarus 



FROM: 




Byron Rhett 

Deputy Director, Planning^nd Development 



SUBJECT: Informational Presentation on the Exploratorium Project at Piers 15 and 17 
on The Embarcadero at Green Street 

DIRECTOR'S RECOMMENDATION: Informational Only- No Action Required 

Introduction 

As the Port Commission is aware, the Port and the Exploratorium have been working for 
the past five years toward the lease, development and rehabilitation of Piers 15 and 17 
to accommodate the relocation of the Exploratorium museum. The site is located on the 
Embarcadero at Green Street (see Exhibit A attached hereto). The terms of the Lease 
and the Development Agreement have been negotiated, and the documents are now 
being finalized. It is expected that the transaction documents will be lodged with the 
Commission Secretary by mid-August. 

At the September 8, 2009 Port Commission hearing Port Staff will seek (1 ) adoption by 
the Port Commission of the findings for the Exploratorium Project under the California 
Environmental Quality Act, (2) approval of the transaction documents and of the 
schematic drawings, and (3) approval of amendments to the Port's Waterfront Land Use 
Plan. A detailed Staff Report will be submitted at that time describing the salient deal 
terms. The informational hearing on August 1 1 , 2009 is intended to give the Port 
Commission and the public an opportunity to see the latest schematic drawings of the 
Project and to describe the next steps. 

Background 

On June 21, 2005 the Exploratorium obtained a resolution from the Board of 
Supervisors exempting a potential lease of Pier 15 from the City's competitive bidding 
policy. Thereafter, the Port and the Exploratorium entered into an Exclusive Negotiation 
Agreement (ENA) and Term Sheet. The Board of Supervisors then determined that the 

Print Covers Calendar Item No. 10A 



i 



F SAN FRANCISCO 



mm 



Project was fiscally feasible and responsible and endorsed the terms of the Term Sheet. 
The parties amended the ENA and Term Sheet in 2008 to add Pier 17 to the lease for 
possible future expansion of the museum. The Board of Supervisors reaffirmed its 
previous findings, determined that the revised Project was fiscally responsible and 
feasible, endorsed the amended Term Sheet, and exempted the lease of both piers 
from the City's competitive bidding policy. 

The Exploratorium proposes to rehabilitate, repair and seismically upgrade the Pier 15 
bulkhead building, shed and connector building and relocate the museum into Pier 15 
from its current location at the Palace of Fine Arts. Pier 15 will provide areas for 
displays and exhibits, a museum store, a cafe, exhibit fabrication areas, classrooms, a 
multi-purpose room and theatre, and ancillary offices. A new "Observatory Building" will 
replace the existing connector building at the east end of Pier 15 and will be connected 
to the Pier 15 shed by a one-story structure. The Observatory Building will house a cafe 
on the first floor, exhibit and event space on the second floor, and a rooftop terrace. 
The paved asphalt decking in the valley between the two piers (currently used as a 
parking lot) will be removed to expose the Bay, and a new deck will be built to provide 
public access to the Bay. This outdoor area will include both a ticketed area and free 
public access areas for the public to enjoy the Bay. There will be additional public 
access around the perimeter of the piers providing unsurpassed views of the Bay 
Bridge, Treasure Island and the East Bay hills. 

The Exploratorium hopes to expand the museum into Pier 17 sometime in the future. If 
it does not do so by the 16*^ anniversary of the lease, Pier 17 will revert back to the Port. 
In the meantime, the Exploratorium will use portions of Pier 17 for museum-related uses 
and sublease the remainder of the pier to various subtenants. 

The Exploratorium will relocate Baydelta Maritime, Inc. (a tug and tow operator at Pier 
15) to Pier 17 and will pay for Baydelta's new office and warehouse improvements, the 
repair of the Pier 1 7 north apron, and for dredging the Pier 1 7-1 9 water basin to 
accommodate Baydelta's tugboats. The Project will provide other waterside uses, 
Including a water taxi landing, berthing of Port vessels at the east apron, and possibly a 
dock along the south apron for vessels invited by the museum. 

Visitors to the museum will be encouraged to take public transit, and most school 
children will arrive by school bus. Parking will be available for museum visitors at 
Seawall Lot 321 , across the street from the site. A 16-year parking agreement between 
the Port and the Exploratorium will provide the museum with non-exclusive use of the 
parking spaces at this lot. The Exploratorium will construct two curb indents, one in 
front of Pier 1 7 for buses and one in front of Pier 1 5 for autos for passenger drop-off and 
pick-up. 

Pier 15 and Pier 17 are located in the Port of San Francisco Embarcadero National 
Register Historic District and are contributing resources to the district. The 
improvements to be built by the Exploratorium must comply with the Secretary of the 
Interior's Standards for Rehabilitation and Guidelines for Rehabilitating Historic 
Buildings ("Secretary's Standards"). The State Office of Historic Preservation has 
determined that the proposed improvements do comply with the Secretary's Standards, 

-2- 



thereby making the Project eligible for historic preservation tax credits. The schematic 
drawings have been reviewed by the Waterfront Design Advisory Committee (WDAC), 
which is advisory to the Port Commission and the Planning Commission. The WDAC 
has recommended that the schematic drawings be approved by the Port Commission. 

The Project's Environmental Impact Report was certified by the Planning Commission 
on July 9, 2009 and concluded that with mitigation measures the Project will have no 
significant, unavoidable impacts on the environment. The Port and the Exploratorium 
have had several discussions with the Bay Conservation and Development Commission 
("BCDC") staff concerning the fill removal requirements specified in BCDC's Special 
Area Plan, which requires removal of the valley, the connector building and the non- 
historic shed additions. The Exploratorium has filed an application to amend the 
Special Area Plan. In addition to the Special Area Plan amendments, a major Permit 
from BCDC is required for the Project. 

Benefits to the Port and to the City 

The Port and the City will achieve many benefits by undertaking this Project: 



• 



• 



• 



• 



• 



• 



• 



Pier 15 and the valley will be rehabilitated and seismically upgraded to the 
Secretary's Standards to ensure sensitive treatment and preservation of the 
building's historic elements and to ensure that future generations will be able to see 
and enjoy this historic resource; 

The Project will continue the Port's efforts, begun with Pier 1 , the Ferry Building and 
Piers 1/2-3-5, to preserve the Port's deteriorating facilities along the waterfront; 

The Port will not have to finance (other than through rent credits) the rehabilitation of 
these severely deteriorated facilities because the Exploratorium is providing the 
financing. As described in the Port's 10-Year Capital Plan, the Port does not have 
the funds to make needed repairs; 

The valley and connector building will be removed to provide public access and new 
views of the water, thereby fulfilling one of the Port's missions to increase public 
access to the waterfront and connection to the Bay; 

The Project will create a distinctive design and presence on the waterfront that will 
make the Exploratorium a landmark that will appeal to residents of San Francisco 
and the Bay Area, as well as visitors from around the globe; 

The museum location in the Northeast Waterfront will enable people to take 
advantage of the tourist activity that exists on the path from the Ferry Building to 
Fisherman's Wharf; 

The Port will retain and create new maritime uses at the piers, including ship 
berthing at the east apron, tug and tow operations at the north apron and water taxi 
service at the south apron; 

The Project will guarantee a rental stream to the Port on Pier 17, and the Port will 
receive market rent from the Exploratorium's customer parking at Seawall Lot 321 ; 



-3- 



• Although percentage rent is not guaranteed, the Port will have the opportunity to 
participate tangibly in the Project's success, resulting in additional cash flow to the 
Port; 

• Because of the excellent access to public transit to and from Piers 15 and 17, the 
museum will be able to reach the under-served and increase the diversity of the 
museum's visitor base; 

• The Project will promote the City's "Transit-First" policy by relocating the museum to 
a site with better access to public transportation than its current location; 

• The Project will contribute to San Francisco's economy through visitor support of 
local restaurants, hotel and retail establishments; 

• The Project will create construction jobs and new permanent jobs; 

• The Project will produce municipal revenues to the City through sales taxes from the 
cafes and museum store and from payroll taxes for temporary construction jobs and 
permanent jobs at the expanded museum; 

• It is estimated that the Project will produce an annual economic benefit of $10.1 
million for San Francisco businesses from expenditures by museum visitors. 

Next Steps 

The Executive Director of the Exploratorium and Wilson, Meany Sullivan, the 
development manager for the Project, will present details of the Project at the August 
1 1 , 2009 Port Commission hearing. No action is required by the Port Commission at 
this time. At the September 8, 2009 Port Commission hearing Port Staff will seek (1) 
adoption by the Port Commission of the findings for the Exploratorium Project under the 
California Environmental Quality Act, (2) approval of the transaction documents and of 
the schematic drawings, and (3) approval of amendments to the Port's Waterfront Land 
Use Plan. A detailed Staff Report will be submitted at that time describing the salient 
deal terms. 



Prepared by: Jennifer Soboi, Project Manager 

For: Byron Rhett, Deputy Director 

Planning & Development 



-4- 




PORTe 




SAN FRANCISCO 

MEMORANDUM 

August 6, 2009 

TO: MEMBERS, PORT COMMISSION 

Hon. Rodney Fong, President 
Hon. Stephanie Shakofsky, Vice President 
Hon. Michael Hardeman 
Hon. Ann^Lazaru^ 

FROM: Byron Rhett (/ 7' ^ 

Deputy DirectoV of Planning and! Development 

SUBJECT: Informational Presentation on the July 2009 Draft Preferred Master Plan 
for Pier 70 and July 29, 2009 Pier 70 Community Workshop. 

DIRECTOR'S RECOMMENDATION: Informational Only - No Action Required 

Overview 

In 2007, the Port of San Francisco commenced a public planning process to develop a 
Draft Preferred Master Plan for Pier 70 (the "Plan" or "Draft Plan"). The Plan area 
covers 65 acres along San Francisco's Central Waterfront just south of Mission Bay, 
bounded generally by Mariposa Street to the north, Illinois Street to the west, 22"^^ 
Street to the south and San Francisco Bay, to the east. As described below, the 
purpose of the Plan is to chart a course to recognize and preserve Pier 70's 
extraordinary collection of historic resources and invite new economic development of 
this brownfields site, including a generous waterfront open space network, in a manner 
compatible with the Port's ongoing maritime ship repair operations at Pier 70. 

As outlined in the July 14, 2009 Port Commission staff report, the Plan is the 
culmination of the most in depth analysis ever conducted for the Pier 70 area and 
included significant public outreach and partnerships with local, regional, state and 
federal agencies. 

At the July 14, 2009 Port Commission meeting, staff presented an overview of the Plan 
goals, objectives, policies and infill design criteria. Since then, there have been 
refinements, and this staff report presents the current modified text of the goals, 
objectives and policies and summary of the infill design criteria, and an overview of the 
Plan organization. 

This Print Covers Calendar Item No. 108 



.TOFSANFRANCSCO .j l IjmilJlMliimiMliy I J J.- J.. J.Wii^^ 



mm^^mmmmmmmmmm^mm^amm^mmmmmmmm 



On July 29, 2009 the Port held a public workshop to present and receive comments on 
the Draft Plan. The meeting was well attended by over 100 interested stakeholders, in 
which comments on the plan were received; this staff report includes a summary of 
comments received to date. At the August 1 1 , 2009 meeting, Port staff will review this 
information and invite further comments from the public and the Port Commission on 
the Draft Plan. 

Plan Vision and Goals 

Pier 70 Vision: 

Create a vital and inviting district at Pier 70 that integrates historic retiabiiitation, 
activates new waterfront open spaces, creates a new iobs center that generates 
revenues critical to realize public benefits, and supports a continuing ship repair 
industry. 

Plan Goals: 

1 . Create a Pier 70 National Register Historic District and rehabilitate its 
extraordinary historic resources. 

2. Preserve the long-term viability of the maritime ship repair industry. 

3. Create major new shoreline open space that extends the San Francisco Bay 
Trail and Blue Greenway to and through Pier 70. 

4. Extend the City street grid to enhance public access and integrate new 
development with the Central Waterfront. 

5. Provide sites for office, research, emerging technologies, light industry, 
commercial and recreational uses to expand San Francisco's economic base, 
and generate revenues to fund public benefits. 

6. Develop a thriving district that recalls Pier 70's historic activity, accommodates 
ship repair operations, and invites visitors to work, learn and play along the 
City's waterfront. 

7. Promote development that is pedestrian-oriented and fosters use of alternative, 
sustainable transportation modes and practices. 

8. Promote sustainable mixed-use infill development and economic vitality that 
places jobs near existing housing to reduce the carbon footprint of regional 
growth, and includes climate adaptation strategies appropriate to this 
waterfront location. 

9. Remediate environmental contamination to enable use and public enjoyment of 
Pier 70 and its waterfront, and improve environmental quality. 

-2- 



On July 29, 2009 the Port held a public workshop to present and receive comments on 
the Draft Plan. The meeting was well attended by over 100 interested stakeholders, in 
which comments on the plan were received; this staff report includes a summary of 
comments received to date. At the August 1 1 , 2009 meeting. Port staff will review this 
information and invite further comments from the public and the Port Commission on 
the Draft Plan. 

Plan Vision and Goals 

Pier 70 Vision: 

Create a vital and inviting district at Pier 70 tiiat integrates historic retiabilitation. 
activates new waterfront open spaces, creates a new jobs center ttiat generates 
revenues critical to realize public benefits, and supports a continuing siiip repair 
industry. 

Plan Goals: 

1 . Create a Pier 70 National Register Historic District and rehabilitate its 
extraordinary historic resources. 

2. Preserve the long-term viability of the maritime ship repair industry. 

3. Create major new shoreline open space that extends the San Francisco Bay 
Trail and Blue Greenway to and through Pier 70. 

4. Extend the City street grid to enhance public access and integrate new 
development with the Central Waterfront. 

5. Provide sites for office, research, emerging technologies, light industry, 
commercial and recreational uses to expand San Francisco's economic base, 
and generate revenues to fund public benefits. 

6. Develop a thriving district that recalls Pier 70's historic activity, accommodates 
ship repair operations, and invites visitors to work, learn and play along the 
City's waterfront. 

7. Promote development that is pedestrian-oriented and fosters use of alternative, 
sustainable transportation modes and practices. 

8. Promote sustainable mixed-use infill development and economic vitality that 
places jobs near existing housing to reduce the carbon footprint of regional 
growth, and includes climate adaptation strategies appropriate to this 
waterfront location. 

9. Remediate environmental contamination to enable use and public enjoyment of 
Pier 70 and its waterfront, and improve environmental quality. 

-2- 



10. Produce a development site plan that is walkable and inviting, and fosters use 
of alternative, green transportation modes and practices; and 

1 1 . Nurture a sustainable neighborhood consistent with San Francisco's 
environmental policies, with special attention to carbon footprint impacts of new 
development and climate adaptation strategies that consider this waterfront 
location. 

The Plan Goals define many public needs. They reflect diverse perspectives expressed 
over the course of the Pier 70 public planning process. Any successful outcome will 
require a sensitive balance, and viable economic development opportunities that invite 
the private sector to work with the City to realize Pier 70's Vision. No one Goal can 
prevail over the rest; the Plan relies on an integrated approach where the public and 
policy-makers understands and accepts each element, to bring the Vision to reality. 

The Plan calls for a program for the 65-acres site and as illustrated on Exhibit A, which 
includes: 

• Continued operation of the ship repair yard on 15 acres; 



• 



• 



• 



Establishment of a Pier 70 National Historic District and adaptive reuse of 
approximately 700,000 square feet of historic buildings; 

Approximately 3,000,000 square feet of new infill development compatible with 
the historic district; 

Approximately 1 1 acres of new waterfront open space and an additional 9 acres 
of internal open space; 



• 6,000 - 8,000 new jobs; and 

• Environmental remediation and infrastructure to support the Plan's mix of land 
uses. 

The program for Pier 70 listed above represents a balance of meeting a variety of goals 
and expectations established for the site, because of this, it is important to recognize 
that for Pier 70 to become the place that is envisioned and anticipated, there is a 
requirement that a certain amount of infill development occur, which will to pay for the 
public benefits in the Plan. 

In addition to establishing the Vision and Goals, the Plan describes the opportunities 
and requirements for development to revitalize Pier 70. With strong public agreement 
and support, this Plan will enable the Port and City to move forward with efforts to 
invest major public and private capital resources at Pier 70. 

The Plan was crafted not only to meet the needs within Pier 70, but was developed in 
the broader context of fitting in with the rest of the City, optimizing investments in public 

-3- 



transportation, maximizing shoreline public access, and upholding public trust principles 
as part of new development and change. 

Plan Organization 

The Plan is organized into 10 chapters and an introduction, which are summarized 
below. 

Introduction 

This section provides a brief overview of the planning process, the approach to 
developing the plan and the plan goals and program summary. 

Chapter 1: Site History 

The most significant influence on the Plan and what makes Pier 70 unique is its 150 
year maritime history and the impact it has had on the development of the nation, its 
significant contribution to the war efforts and the architectural and labor history that 
shaped Pier 70. This rich history, reflected in many of the architectural structures at 
Pier 70, is the basis for the Plan goal to permanently memorialize the site's importance 
in a Pier 70 National Register Historic District. 

Chapter 2: Ship Repair 

Ship repair establishes Pier 70's identity. This chapter explains how this maritime 
industry functions and its importance in the City's economy. As a key public trust use 
that is engrained as part of the Port's maritime mission, the long-term continuation of 
the ship repair industry is a requirement of the Plan. New land uses and development 
under the Plan must accommodate the requirements of this industry. The Plan 
recognizes that, just as it has in the past, ship repair operations will continually evolve 
and respond to economic and technological changes. This is accepted as part of 
historic preservation of Pier 70, because retaining this maritime industry is what 
maintains the authenticity of this site, and the Central Waterfront at large. 

Chapter 3: Context for Change 

This chapter provides an overview and context for recent land use policies and plans 
adjacent to or near Pier 70, including San Francisco's Eastern Neighborhoods Plan, the 
Mission Bay Redevelopment Plan, the City's Economic Development Strategy and the 
Eastern Neighborhoods transportation program (EN TRIPS) led by the Municipal 
Transportation Agency. The City's new policies and capital investments that have 
emerged in the last 10 years establish a sound setting for the revitalization of Pier 70. In 
addition, this chapter provides an overview of previous Pier 70 planning efforts and the 
market assessment and potential appropriate uses for Pier 70, which also highlights 
Pier 70's extraordinary opportunities. 

Chapter 4: Bringing Together the Past, the Present and the Future 

This chapter broadly describes how the plan integrates the various Plan elements with 
the site setting including the historical uses and Pier 70's relationship to the surrounding 
neighborhoods. In addition, it further articulates the Plan's goals. 



-4- 



Chapter 5: Historic Preservation 

This chapter presents the historic preservation strategy component of the Plan. The 
historic preservation policies are: 

1 . Recognize continuation of viable ship repair and drydock operations as an act of 
preserving Pier 70's history, and give priority to shipyard changes that may be 
necessary to support the industry while maintaining the overall integrity of the 
historic district. 

2. Protect the integrity of the Pier 70 Historic District by directing major new 
construction to open and vacant areas, or locations containing non-contributing 
resources. 

3. Encourage the appropriate adaptive reuse of the historic resources that add new 
life and complement the architectural character and context of Pier 70 consistent 
with Secretary Standards. 

4. Apply infill development design criteria to ensure new construction meets Plan 
objectives and complies with Secretary Standards. 

Chapter 6: Land Use and Adaptive Reuse 

This chapter presents the land uses recommended for Pier 70 and how they integrate 
with the ship repair operations and how the uses will activate the site including 
appropriate uses within the historic core and within the new infill development areas. 
The policies for Land Use and Adaptive Reuse are: 

1 . Recognize that the continuation of ship repair industry operations is consistent 
with the historic preservation objectives of this Plan and the Port's public trust 
mission. Ensure that new development and land uses are compatibly designed 
and managed to respect ship repair operational needs. 

2. Invite a wide range of activities that promote public use and appreciation of the 
waterfront and adaptive reuse through rehabilitation of Pier 70's historic 
resources. 

3. Promote a mix of uses oriented toward commercial, office, educational, retail, 
cultural and entertainment uses along 20th Street, to provide an active entrance 
to Pier 70. 

4. Target publicly-oriented uses for the Union Iron Works Machine Shop as an 
anchor facility with uses that activate the 20th Street corridor to attract broad 
public appreciation of this very significant historic resource. 

5. Allow office, biotech, research and development, light industrial and institutional 
uses in new construction and rehabilitated historic resources. 



-5- 



6. Consistent with tiie open space policies of this Plan, encourage the imaginative 
design of new development which contributes to the experience, activity and 
enjoyment of shoreline parks and public spaces. 

7. Allow residential development opportunities on parcels along Illinois Street, if 
conflicts with ship repair operations and other adjacent uses are minimized. 

Chapter 7: Form and Character of Infill Development 

This chapter presents the criteria for new infill development that recognizes the 
industrial setting and site history of the site. The criteria provides a frameworl< for new 
infill development as interpreted from the Secretary of Interior Rehabilitation Standards 
for historic districts, specifically for Pier 70. The criteria for new infill development are 
organized into two sections: 1) area wide elements and 2) zone based criteria based 
upon the location within the site. This chapter supports the historic preservation strategy 
outlined in Chapter 5 and demonstrates that the development program proposed is 
compatible and feasible. In addition, this chapter provides the preliminary strategy on 
sustainable development practices for Pier 70, for those practices that are not 
specifically identified in other chapters of the Plan. The policies for Form and Character 
of Infill Development are: 

1 . Respect the district as a historic landscape that reflects the industrial 
shipbuilding processes including the evolution of the Union Iron 
Worlds/Bethlehem Steel and the ongoing ship repair activity on the side. 

2. Enhance the unique industrial heritage of the area. 

3. Showcase the historic district's resources, landscape features and waterfront 
location. 

4. Develop a pattern that reflects the unique building/open space relationships that 
were characteristic of the historic district. 

5. Allow for architectural diversity that is compatible with the historic character of 
the district. Add new architecture that complements the surrounding resources 
and promotes life and vitality in the area. 

6. Encourage the design of buildings and open spaces that not only respond to Pier 
70's historic qualities but also strengthen connections to Dogpatch and Potrero 
Hill neighborhoods. 

7. Encourage public access and views to the waterfront and connect shorelines 
parks and promenades with the proposed open spaces that are integrated with 
the development. 

Chapter 8: Open Space and Public Access 

This chapter presents the open space concept for Pier 70, which includes 



-6- 



approximately 1 1 acres of new shoreline opens space and up to 9 acres of internal 
plazas and public spaces. The policies for Open Space are: 

1 . Create public open spaces that establish a sense of identity and focus for new 
development at Pier 70 that is sensitive to ship repair operations and attract a 
diverse spectrum of users. 

2. Develop a diverse network and program of parks, paths, roads and public 
spaces that connect upland areas to the waterfront; provide recreation amenities 
for the community; and celebrate and reveal the rich history of Pier 70. 

3. Integrate the Bay Trail and Blue Greenway into the design of the Pier 70 open 
space network, which creates an inter-connected path that links public open 
spaces along the shoreline. 

4. Use landscape paving and materials to improve streets, pedestrian ways, and 
other public spaces that interface with historic resources to respect the historic 
industrial character of Pier 70 and create shoreline access wherever possible. 

5. Create and improve pedestrian ways, promenades and historic pathways to 
provide a variety of routes through Pier 70 as an integral element of the open 
space network connecting the Pier 70, Mission Bay, Dogpatch, and Potrero Hill 
neighborhoods to the bayfront. 

6. Create a program of interpretative signage within the open spaces areas that 
provides information on the history and importance of the site, ship repair 
operations, and labor history. 

Chapter 9: Transit, Circulation and Parldng 

This chapter presents the concept for transit, circulation and parking for Pier 70. The 
Plan calls for new uses to be dependent on public transit and limits the use of 
automobiles. In addition, it recommends that the site be serviced by a new ferry 
terminal that could also be utilized by Mission Bay. The transit, circulation and parking 
policies are: 

1 . Increase public transit service by providing ferry and shuttle connections 
between Pier 70 and other public transit hubs. 

2. Extend 19th Street access to ensure continued reliable maritime industrial 
access to the shipyard. 

3. Establish a street system within Pier 70 that connects with the street grid from 
Potrero Hill and the Dogpatch neighborhoods. 

4. Create walkable and bikeable streets. 

5. Introduce a network of pedestrian ways integrated with new development. 



6. Locate and manage parking facilities to promote shared use operated on a 
market-rate pricing basis, consistent with smart growth objectives. 

Chapter 10: Implementation Strategy 

This chapter presents the regulatory partners and their role to implement the Plan, the 
financial feasibility analysis conducted to support the Plan, including the funding tools 
required and an overview of the developer solicitation process considered to move the 
Plan into implementation. 

The financial feasibility analysis assumes the Port takes advantage of the financing 
tools afforded by recent legislative successes including the Proposition D, San 
Francisco Charter Amendment, infrastructure financing district, and the Proposition A, 
Clean and Safe Neighborhood Park General Obligation Bond funding. 

Excluding the ship repair leasehold, the analysis considers the costs and revenues to a 
developer of Pier 70. The Port will continue to receive rent from Pier 70 at the level it 
does presently, about $3 million annually. Even taking full advantage of the most 
accessible of the public financing tools above leaves a funding gap. Financial feasibility 
analysis currently projects that full build-out will generate a rate of return that falls short 
of that generally required to attract private development partners. This analysis projects 
that land lease revenues from new development, coupled with $310 million in public 
financing and historic tax credits, leave a project feasibility gap estimated at $50 million 
in today's dollars. The Port continues to explore means to improve the financial 
prospects for Pier 70 and expects that its private development partners will creatively 
address this gap. 

Private sector partners will be critical to realizing the Plan. After the public and the Port 
Commission review this document. Port staff will present options for how to best choose 
partners for Pier 70. In particular, the Plan identifies the Union Iron Works Machine 
Shop for a publicly accessible use, such as a cultural activity venue, market hall, or 
institutional use. The Port, in consultation with City policymakers, will seek an 
appropriate partner to realize this vision. 

Summary of July 29. 2009 Community Workshop 

On July 29, 2009 the Port hosted the fourth of a series of community workshops on the 
Pier 70 planning, to review and receive comment on the Plan. The workshop was 
attended by over 100 stakeholders representing historic preservation, open space and 
environmental advocates, community members. Pier 70 tenants, consultants and 
development interests. Port staff and its consultants provided an overview of Plan, 
followed by an "open house" question and comment period and a group review of 
comments. The workshop closed with additional question and answers. 

The open house portion of the agenda was organized around three subject groups: 
1) historic preservation, infill design criteria, adaptive reuse of the Union Iron Works 
Machine Shop and ship repair; 2) open space and environmental remediation; and 3) 
land use, urban design, transportation and new development. In general, public 

-8- 



comments were very supportive of the plan and the process. The following is a brief 
summary of the comments and, where appropriate, Port staff responses. 

1) Historic Preservation, Infill Design Criteria, Adaptive Reuse of the Union Iron 
Works Macfiine Shop and Sfiip Repair: 

• Why were specific guidelines developed for new infill development, but not 
for the adaptive reuse of the existing structures? 

• To what extent will the creation of an historic district allow existing historic 
structures to be altered to accommodate new uses and infill development 
within the district? 

• Suggestions for the reuse of the Union Iron Works Machine Shop (Building 
113/14) included: museum, interpretive center, cultural or arts center, 
European-style public market, an industrial art production or fabrication 
center, or a combination of several of these types of uses. 

2) Open Space and Environmental Remediation 

The parks should include some habitat restoration and include habitat for 
nesting birds. 

Small boat access should be located outside buffer area required for ship 
repair. 

How does the Plan integrate with the City's "Better Streets Plan." 

Other recreation opportunities should be examined. 

The Plan should include green roofs. 

Slipway Park will need to be activated so that it is not isolated. 

Open space should be phased early in development. 

The cost estimate for environmental remediation appears too low. 

3) Land Use. Urban Design, Transportation and New Development 



The Plan needs to better articulate the allowable or flexibility of the building 
heights; are the heights recommended in the plan the maximum heights? 

The Plan should encourage of range of heights to avoid the Mission Bay 
sameness. 

The Plan should balance the types of use and avoid having too much UCSF 

-9- 



hospital types of uses creep into the area. 

• Positive response to the Plan's focus on the use of bikes, transit and 
pedestrian-supported transportation modes. 

• The Plan should recognize and allow for the continued use for artists, which 
have been a long term interim use within Pier 70. 

• The Plan should specifically identify that space be devoted within the 
development to explain and interpret the history of Pier 70. 

Next Steps 

Throughout the summer, the Port will continue to conduct community outreach to 
present and receive comments on the Draft Plan, including questions and directions 
from the Port Commission, by August 28, 2009. The Port is working with the Planning 
Department to schedule additional informational briefings to the San Francisco 
Planning Commission and Historic Preservation Commission. 

The public is invited to submit comments online at www.sfport.com/pier70 as well as at 
public meetings. Comments received will be compiled and where appropriate 
incorporated into the Plan. In September, Port staff will report to the Port Commission 
on comments received and further proposed refinements prior to completing the Pier 70 
Preferred Master Plan. Compiled comments will be posted on the Port's Pier 70 web 
site. 

In September, Port staff will present development solicitation options for the Port 
Commission's consideration. If supported by the Port Commission, the Plan (as may 
be revised further to respond to public comments) will provide the basis for a developer 
solicitation for Pier 70. 

Important Dates 

• Central Waterfront Advisory Group meeting August 26, 2009 to comment on 
Draft Plan; Pier 1 - 5:30 p.m. - 7:30 p.m. 

• PUBLIC COMMENT DEADLINE: AUGUST 28, 2009. Comments may be 
received in public hearings, writing on online at www.sfport.com/pier70 or to 
david.beaupre@sfport.com. 

• September 2009: Port staff summary of input received, any revisions to Plan, 
and recommended next steps for Port Commission consideration. 



Prepared by: David Beaupre, 

Senior Waterfront Planner 

For: Byron Rhett, Deputy Director 

Planning and Development 
-10- 



Exhibit A - Pier 70 Plan Overview 




I '^ VERY SIGNIFICANT PCSOURCE 

I I SIGN1PK:A^^■ resource 

I I CONTEXT RESOURCE 
I I OPEN SPACE 
I I SHIP REPAIR 
r~{ BUILCTNG REMOVED 
I I NEW BUtLOING PADS 



VISUAL AND PED€STRiAN LINKAGE 
VEHKULAR UNKAGE 



SAN FRANCISCO 
PORT COMMISSION 



AUGUST 11, 2009 
MINUTES OF THE MEETING 



GOVERNMENT 
DOCUMENTS DEPT 

SEP 1 1 2009 

SAN FRANCISCO 
PUBLIC LIBRARY 



MEMBERS, PORT COMMISSION 

HON. RODNEY FONG, PRESIDENT 

HON. STEPHANIE SHAKOFSKY, VICE PRESIDENT 

HON. MICHAEL HARDEMAN 

HON. ANN LAZARUS 



MONIQUE MOYER, EXECUTIVE DIRECTOR 
AMY QUESADA, COMMISSION SECRETARY 



CITY & COUNTY OF SAN FRANCISCO 
PORT COMMISSION 

MINUTES OF THE MEETING 
AUGUST 11, 2009 

1 . CALL TO ORDER / ROLL CALL 

Commission President Rodney Fong called the meeting to order at 2:04 p.m. The 
following Commissioners were present: Rodney Fong, Stephanie Shakofsky and 
Ann Lazarus. Commissioner Michael Hardeman arrived at 2:30 p.m. 

2. APPROVAL OF MINUTES - July 14, 2009 

ACTION: Commissioner Lazarus moved approval; Commissioner Shakofsky 
seconded the motion. All of the Commissioners were in favor; the minutes of the 
July 14, 2009 were adopted. 

3. PUBLIC COMMENT ON EXECUTIVE SESSION 

4. EXECUTIVE SESSION 

A. Vote on whether to hold closed session to confer with Legal Counsel and 
Real Property Negotiator. 

ACTION: Commissioner Lazarus moved approval; Commissioner Shakofsky 
seconded the motion. All of the Commissioners were in favor. 

At 2:05 p.m., the Port Commission withdrew to executive session to discuss 
the following: 

(1) Discussion of Executive Director's Performance Evaluation for Fiscal 
Year 2008-09 pursuant to Section 67.10(b) of the Administrative Code 
and Section 54957(b) of the California Government Code. 

(2) CONFERENCE WITH LEGAL COUNSEL REGARDING EXISTING 
LITIGATION MATTER (DISCUSSION & ACTION ITEM). 

a. Discuss existing litigation matter pursuant to California Government 
Code Section 54956.9(a) and San Francisco Administrative Code 
Section 67.10(d) (1 case). 

• F. Alioto Company. Inc. v. City and Countv of San Francisco and 
ExxonMobil Oil Corporation . Superior Court for the State of 
California, County of San Francisco (Case No. CGC-89-489792) 

M081 12009 



(3) CONFERENCE WITH REAL PROPERTY NEGOTIATOR - This is 
specifically authorized under California Government Code Section 
54956.8. This session is closed to any non-Citv/Port 
representative.* 

a. Property : Pier 15/17 (Embarcadero at Green Street) 

Person Negotiating : Port: Byron Rhett, Deputy Director, Planning and 

Development 

*The Exploratorium: Dennis Bartels 

5. RECONVENE IN OPEN SESSION 

At 3:30 p.m., the Commission withdrew from executive session and reconvened in 
open session. 

ACTION: Commissioner Shakofsky made a motion to adjourn executive session 
and reconvene in open session; Commissioner Hardeman seconded the motion. 
All of the Commissioners were In favor. 

ACTION: Commissioner Shakofsky made a motion to not disclose any information 
discussed in executive session; Commissioner Lazarus seconded the motion. All 
of the Commissioners were in favor. 

6. ANNOUNCEMENT OF PROHIBITION OF SOUND PRODUCING DEVICES 
DURING THE MEETING 

The Commission Secretary announced that the ringing of and use of cell phones, 
pagers, and similar sound-producing electronic devices are prohibited at this 
meeting. Please be advised that the Chair may order the removal from the 
meeting room of any person(s) responsible for the ringing or use of a cell phone, 
pager, or other similar sound-producing electronic device. 

7. EXECUTIVE 

A. Executive Director's Report: Executive Director Monique Moyer reported the 
following: 

• Extension of the response deadline for the RFP for a Concrete Batching 
or Asphalt Production Facilitv at Seawall Lot 352 - from September 17. 
2009 to October 29. 2009 - On May 29, 2009, Port staff issued the SWL 
352 RFP seeking proposals from qualified operators for a long-term lease 
for the development and operation of a concrete batching facility and/or 
asphalt plant with a bulk maritime terminal. The deadline for bid submittal 
was September 17, 2009. The property consists of approximately five 
acres at SWL 352 with non-exclusive berthing access to Pier 94. The site 
is located in the Southern Waterfront, in an area that has experienced 
considerable economic investment and development in the last decade. 

M08112009 



With the revitalization of this area, Port staff believes that there is an 
opportunity to establish a concrete batching facility and/or asphalt plant at 
this location. If the Port Commission elects to pursue an asphalt plant at 
the site, the City's Department of Public Works, in consultation with the 
Purchaser, would negotiate a companion long-term contract to supply the 
City with asphalt pavement materials. 

At the request of the Port and DPW, the Board of Supervisors will hold a 
hearing on the City's Municipal Asphalt Plant and the Port's RFP in 
September or early October. The Port amended the RFP to extend the 
deadline for bid submittal until October 29, 2009. With the Port 
Commission's permission, staff propose to have the item heard at the 
Board of Supervisors and postpone the due date from September 17, 
2009 to October 29, 2009. 

Environmental Award to Princess Cruises - As the Commission may 
recall, the Port started this program in 2005 to recognize cruise ships that 
reduce air and/or water pollution when they call at the Port of San 
Francisco. It's a fairly small program, it's simply an award. There's no 
monetary compensation or prize money that comes with it. Interestingly 
enough, it's become very prestigious among the lines. When you go onto 
their web sites, you'll often see that they are self-promoting that they've 
won these awards from the port. 

The reason this item is on the Executive Director's report is because 
Dawn Princess just recently won the award for the fifth consecutive year. 
That is the only ship, of all the ships that call here, who has been 
recognized for her environmental stewardship every single year. On July 
28, 2009, Michael Nerney presented to Dawn Princess' captain the award 
for environmental stewardship. In 2005, we recognized four ships. In 
2006, six ships. In 2007, seven ships. In 2008, 5 ships. We expect to do a 
higher volume in 2009. We're also taking a look at making the award 
even more meaningful. 

Conqresswoman Loretta Sanchez's visit to the Port of San Francisco - 
On Friday, August 7, 2009, Congresswoman Loretta Sanchez came to 
visit the Bay Area to talk about security as it relates to ports. She primarily 
wanted to visit with the U.S. Coast Guard but chose also to visit with the 
Port of San Francisco. In addition to coming to the port's offices, she then 
crossed the bay to visit with the Coast Guard at Coast Guard Island. It 
probably would have been more convenient for her to have visited with 
the Port of Oakland but she chose the Port of San Francisco. 
Congresswoman Sanchez is interested in understanding port security, 
maritime safety and cruise terminal operations. She is the vice chair of 
the Committee on Homeland Security and also chairwoman of the 
Subcommittee on Border, Maritime and Global Counter Terrorism. From 
her understanding, it was an excellent meeting. 



M081 12009 



• 



Byron Rhett represented the port along with a number of our security, 
maritime and PR staff. The Coast Guard was represented by its highest 
officer, the Rear Admiral Joseph Castillo, who is the District 1 1 
commander and several of its staff. It was a very important meeting. 
In addition to meeting at Pier One, they toured the two cruise ship 
terminals. Piers 27 and 35, as well as the Coast Guard Island. It was very 
good for the port. We're very pleased that we were chosen. 

Speaker of the House Nancv Pelosi's visit to the Port of San Francisco - 
August 10. 2009 - On Monday, August 10, 2009, we were privileged to 
host Speaker Nancy Pelosi at the BAE shipyard at Pier 70. She was 
interested in finding out more about the shipyard, since we've asked for 
her assistance many times as well as the impact that it has on jobs. She 
met with senior officials of BAE systems as well as the port and toured 
the site, met with the Coast Guard staff who were there because one of 
their vessels is in dry dock as well as members of the various crafts that 
were there working yesterday. It was a great visit. She seemed genuinely 
pleased to have been able to experience the shipyard and understand a 
bit more. Of course, the first question from both Speaker Pelosi and her 
staff was, "How the heck do you lift a ship and what is a dry dock? It 
reminds us that it's a very esoteric term. We need to do a better job of 
explaining how that actually happens but it was incredible to see. That 
was an outstanding visit for us. We were able to talk to her a little bit 
about some of our issues as it relates to the Army Corps of Engineers 
and some other planned and hopeful requests for funds. So hopefully, 
good things will come of it as she works her magic. 

Passing of Fred Henning. General Manager of Bay & Delta - We will talk 
about this a little bit more but it deserves mentioning that on July 27, 
2009, Fred Henning, who is the general manager of Bay and Delta 
passed away at the age of 41 leaving behind some very young children. 
He has been a fantastic person to work with at the port. Bay and Delta is 
a very important maritime tenant to the port. Our heart and sympathy 
goes out to his family and to the Bay Delta family. We've invited them to 
come and celebrate his life with the port sometime in the near future. 
We'll have a chance to talk more about his contributions. His memorial 
service was held yesterday at the California Maritime Academy. It was a 
very long, touching and moving ceremony. He's a very big loss to our 
maritime community. 



8. CONSENT 



Reguest approval of Fifth Amendment to Lease No. L-12540 with SF 
Recvcling and Disposal. Inc. at Pier 96 near Cargo Wav. (Resolution No. 09- 
41) 



M081 12009 



B. Request approval of Memorandum of Understanding between the San 
Francisco Public Utilities Commission and the Port regarding the North Shore 
Force Main Sewer Improvement Proiect (Embarcadero. Drumm and Spear 
Streets) including Seawall Lot 351 located at Washington and the 
Embarcadero. (Resolution No. 09-42 ) 

C. Reguest approval of Fiscal Year 2009-10 Executive Director Salary and 
Benefits. (Resolution No. 09-43 ) 

D. Reguest authorization to accept and expend $5.771.340 in Proposition IB 
Grant Funds from the California Office of Homeland and Security for security 
improvements at the Port. (Resolution No. 09-44 ) 

ACTION: Commissioner Hardeman moved approval; Commissioner Lazarus 
seconded the motion. All of the Commissioners were in favor. Resolution 
Nos. 09-41, 09-42, 09-43 and 09-44 were adopted. 

9. FINANCE AND ADMINISTRATION 

A. Reguest approval of the Port's Revised Annual Operating and Capital 
Budgets for Fiscal Year 2009-10. (Resolution No. 09-45 ) 

Andres Acevedo, Port Finance, indicated that Tina Olson is on vacation. As 
the Commission is aware, in February, the Commission passed the 
preliminary budget that went to the Mayor's office then to the Board of 
Supervisors and then for the Mayor's signature. During that process, there are 
often significant changes made to it. Staff is bringing it back to the 
Commission for the final approval of the final budget. It's the last step of the 
budget process. Including the capital and the operating budget, the budget 
increased by $2.1 million over what was approved in February. 

The operating budget decreased by about $35,000. Annual projects 
increased by about $56,000. The capital has the biggest increase, $2.1 
million. Revenues to cover these increases came from two sources: (1) 
additional revenues anticipated with the new management agreement for the 
parking lots in the northern waterfront which is approximately $500,000. The 
$500,000 is appropriated to the Taylor Street improvement project for which 
DPW recently issued bid requests. After DPW completed the design, the 
engineer's estimate indicated at $50,000 shortfall for the Port's portion of the 
project; (2) $1.6 million in interest earnings associated with the $20 million the 
Port received from the sale of the Watermark Condominiums that is allocated 
to the cruise terminal project. 

The operating budget increased by $637 from the budget approved in 
February. There were some significant changes to the expense items: 
Salaries and benefits decreased by $400,000 primarily from the givebacks 
that the unions negotiated with the Mayor's office. Citywide overhead 
decreased by $277,000 based on the city's annual cost allocation plan. 

M08 112009 

-5- 



In February, staff presented to the Commission tlie preliminary numbers. Tiie 
Mayor's office and the Board of Supervisors reviewed the Port's budget. As 
part of the budget process, Harvey Rose always goes through our budget. 
There were some cuts made primarily to other current expenses and 
materials and supplies, approximately $250,000. On the other side, we were 
offset by about $1 million increases in service to other departments. 

We were able to negotiate with the Mayor's office and get services that would 
help our mission. We have money going to city planning, approximately 
$476,000, to cover $342,000 in CEQA fees related to the port's upcoming 
revenue bond-funded projects, and $134,000 to fund the balance for the 
Northeast Seawall lot planning study. We expect to reimburse the $342,000 in 
CEQA fees with the proceeds from the Port revenue bond we plan on issuing 
this fall. 

Rec & Park increased funding by $300,000 for assistance in the Blue 
Greenway project as well as some support in permitting efforts for the 
projects funded by the general obligation and the revenue bonds. 

Department of Technology increased funding by $90,000 to fund the Port's 
GIS system and making sure the port's areas are mapped correctly. 

General City Responsibility increased funding by $60,000 to the Department 
of Emergency Management (DEM). The 2010 Golden Guardian emergency 
response exercise will take place on Port property. We're providing funds to 
DEM for their planning efforts. 

MTA increased funding by $40,000 to fund increased maintenance, service 
and collection costs associated with the newly installed pay stations. 

The remaining $33,000 is related to miscellaneous increases to a few work 
orders that the Controller's office made to balance the City's work order 
accounts. 

The fire department's Port funded budget increased by $38,000 for the 
fireboat and wage and fringe benefit increases. 

The Controller's office increased the Port's interdepartmental recovery by 
$144,000 which is the projected revenue from the new cigarette butt fee, a 
20-cents-a-pack fee. It is unclear whether the City will successfully collect the 
fee due to potential litigation from the tobacco industry. We're not sure if that's 
going to come through but staff feel that we can cover it if it doesn't come 
through. We have the opportunity of charging back the CEQA fees to the 
bond funds. That would free up some additional operating funds to cover any 
shortage. 



M08112009 

-6- 



There were some decreases in the annual projects. Most of them were based 
on the current year spending and projected spending. The BART retrofit 
project was reduced to zero because BART is going to be handling that. 

The hazardous materials abatement funding was reduced and the budget 
was moved to a DPW work order because the contracting process was so 
long and involved. It was originally budgeted as a project. 

The Board of Supervisors added back $300,000 to the Port's budget for 
employment training programs. Port staff are developing a proposal for an 
employment training program that will be submitted to the Port Commission 
and Board of Supervisors in September 2009 for review and approval. 

ACTION: Commissioner Lazarus moved approval; Commissioner Hardeman 
seconded the motion. All of the Commissioners were in favor. Resolution No. 
09-45 was adopted 

10. PLANNING & DEVELOPMENT 

A. Informational presentation on the Exploratorium Project at Piers 15 and 17 on 
The Embarcadero at Green Street . 

Jennifer Sobol, Planning and Development, presented an informational 
presentation to the Commission about the Exploratorium project at Piers 15 
and 17. No Port Commission action is required today. At the September 8th 
Port Commission meeting, Port staff plans to present to the Port Commission 
the transaction documents and request approval of the Exploratorium project 
at that time. The staff report will be issued and it will be quite detailed. It will 
explain all of the deal terms of the transaction documents. As the Commission 
is aware, staff has been working on this project for about five years, working 
towards a lease development and rehabilitation of Piers 15 and 17. Today, 
the Exploratorium will present the design plans and explain their proposal. 

The Exploratorium is proposing to lease Piers 15 and 17 plus the connector 
building and the valley between the two piers, rehabilitate, seismically 
upgrade Pier 15, move the museum into that facility with lots of public access 
and use portions of Pier 17 for museum-related uses and sublease the rest of 
the facility to other users. 

Bay Delta Maritime, which is the port's tug-and-tow operator at Pier 15, would 
be relocated to Pier 17. The Exploratorium will build new premises for them, 
so they will continue to operate. We will continue to have maritime uses at the 
facility. 

The Port and the City will achieve many benefits by undertaking this project: 



M08112009 

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• Saving and restoring valuable historic waterfront resources by 
rehabilitating them to the Secretary's standards and improving them with 
new substructure repair work and utilities and improvements. 

• The museum will activate the waterfront with an exciting new use and 
bring visitors, residents and locals to the waterfront, which is one of the 
Port's missions. 

• The project will create lots of public access and new views. 

• It will provide a guaranteed rental stream on Pier 17 to the Port. 

• It will include lots of maritime uses including ship berthing, tug-and-tow 
operations and one-day water taxi service. 

• The project will also contribute to San Francisco's economy by supporting 
local businesses in the area, restaurants, hotels and retail establishments. 
It will also create construction and permanent jobs. 

Ms. Sobol looks forward to presenting all the transaction documents at the 
September 8th meeting for Commission's approval and introduced Dennis 
Bartels, Exploratorium's executive director. 

Dennis Bartels offered his condolences to the family of Fred Henning for their 
tragic loss. 

Mr. Bartels indicated that the design is a culmination of a long road for them 
with many public agencies and public outreach involved. He thanked Port 
staff: Jennifer Sobol, Byron Rhett and Monique Moyer who have worked with 
them the past months and years to help them arrive where we are today, 
which is a long distance from where we have all started. 

This has really been a truly mutual effort, something that we're really very 
proud of. It would not have been possible without a lot of vision and a lot of 
imagination on the part of the Port and its leadership. They are very proud to 
have the Port as a partner on this truly remarkable endeavor. 

Their team is led by Janice Thatcher of Wilson, Meany, Sullivan. She has 
been his voice in these discussions with the Port, and I am pleased with the 
outcome. He thanked her for her support in bringing us this incredible 
distance. 

Janice Thatcher indicated that they're excited to show some updated design 
of the Exploratorium, which the Commission haven't seen since 2008. 

She thanked Port staff: Jennifer, Byron, Grace Park, and Jonathan Stern. 
They've been working very hard and closely with them over the past months 

M081 12009 

-8- 



to bring this transaction together. They've spent a lot of time together. They're 
very pleased with the progress today. 

James Suh presented a basic overview of the full design of the project. It has 
changed a bit since the last time the Commission saw it, specifically on very 
key components of the project. He showed a model of the project. It shows 
Pier 15 on the right, Pier 17 on the left. The valley configuration is very similar 
to what the Commission saw in February, which has a more angular 
geometry. It allows more pedestrian access up front on Herb Cane Way and 
sort of funnels people through the valley of the project. All the way on the far 
side is the new connector building, which they call the observatory building. It 
has changed quite a bit since this design. 

He showed the master plan for the Exploratorium for the full life of their 66- 
year lease. Pier 17 would be fully developed in this scheme. Pier 15 is down 
on the southern side here. There's a retail cafe in the front, off of Herb Cane 
Way which is open to the public. There's a small cafe next door, which again 
is open to the public. On the far eastern side on the right will be the larger 
public cafe, a museum cafe, also open to the public. 

In the future, on the upper left-hand corner, there will be an additional cafe or 
retail zone, open to the public. In Piers 15 and 17, there will be a public 
access component inside the buildings very similar to Pier One, which will 
house a bayside history walk. 

All the yellow that you see are the gallery spaces. All of that yellow will 
actually be double-height spaces. All the other blue and gray spaces are 
ancillary both for the shop making, laboratories and the classrooms. The next 
few images just black-and-white plans that you might see in the packet in a 
few weeks that explain the schematic drawings that are attached to the 
transaction documents. 

This is generally the more basic drawings of the colored version. This is the 
second floor. There will be a mezzanine that will be called pods throughout 
the shed. It's primarily done that way in order to establish and maintain the 
double-height spaces and the historic resource. 

On the roof, they plan to put photovoltaic panels all across Pier 15 in the first 
phase. This is part of the goal of the Exploratorium to have a true net-zero- 
energy museum. Hopefully, the first of its kind in the United States, maybe 
even the world. 

In the front of Pier 15, they will be infilling the archway, very similar to Pier 
One again with storefront. That'll be part of the main entry for the 
Exploratorium, which filters into the public lobby and the bayside history walk. 
Along the typical shed areas, the rollup doors will again be rolled up, held in 
place as they are historic and filled with some additional storefronts, again, 
similar to the Pier One and Ferry Building. 

M08112009 

-9- 



All the colors you see here is the full public access components of the project 
in Phase one. The Bay Delta would be moved from the southern apron to the 
northern apron, rebuilt by the Exploratorium. This allows a whole 
circumnavigation of the full Pier 15 perimeter. In the dark orange are the 
public components of the intehor of the project. Part of all of these orange 
areas is a great opportunity for the Exploratorium to pursue, which is 
something unique and new to them. 

An article in the SF Chronicle a few months ago indicated that the 
Exploratorium has now revealed a new science exhibit in Fort Mason. They 
have about a dozen exhibits free to the public. It is an experiment for them in 
preparation for this particular site. Some of the investigations will be focused 
on the site itself, including the seawall and investigation of revealing the 
natural phenomenon that currently exists. 

Another exhibit would be a tidal wall that will actually ebb and flow with the 
rising tides, maybe even create a fountain. As you enter the building, you see 
the Bayside history walk as you enter the archway which leads towards the 
main gallery. 

The total volume of the space is celebrated in these images. As you get 
closer, you see there's a low-high glass wall that looks into the ticketed 
Exploratorium space. You get a sensory experience with the sound and the 
visual without actually paying for a ticket. 

This is the actual ticketed space of the gallery. Then, a few images on the 
east side on the bay. You see the existing connector building, which currently 
creates a monolithic fagade to the city. There is no public access here. 

They are demolishing that existing, non-historic piece of the building and 
replacing it with a new observatory building, a two-story piece which is both 
respectful to the Pier 15 and Pier 17 facades by moving away from the 
facades with a one-story connection, also being architecturally distinctive and 
trying to respect the existing resource. 

On the valley side, there's currently a parking lot and load restriction. This is 
what the new building will look like. Again, opening up a 60-foot-view corridor 
to the east side of the pier, which currently there isn't access to and also 
creating a smaller building that would house very specific exhibits for the 
Exploratorium. 

Here, we look as if we were on the observatory building, a little bit off of it and 
looking back towards the city. This is a view from Calhoun Terrace looking 
down at the finished product. 

Commissioner Fong indicated that it looks like an exciting project. He grew up 
going to the Exploratorium and he's excited to see it come down this way. 

M08112009 

-10- 



Zeke Kossover, the Jewish Community High School of the Bay in San 
Francisco, indicated that he and his students have had a lot of opportunity to 
interact with the Exploratorium. They're very excited about its new location. 
He has taken classes there to improve his teaching, and have become a 
master teacher in their program to help other teachers become better 
teachers. The new location would be much more convenient for people from 
all over San Francisco as well as all over the Bay Area. His students have 
also had lots of opportunities to go to the Exploratorium. Since many of them 
don't drive, the current location of the Exploratorium is very difficult for them. 
This location would be much superior for them, much better access for them 
to get there on their own. Especially since he likes to not only have field trips 
when the whole class goes, but the students can go there individually. That 
opportunity really just can't be fulfilled at the current location without great 
difficulty. The Exploratorium has many benefits to his students and has 
greatly improved the science education in his classroom. He thinks it would 
be very useful for the entire city to improve science education. 

Morton Beebe, resident of the Embarcadero at Telegraph Landing, indicated 
that he frequently walks the area and realizes what the traffic is like now. He 
does not see it being necessarily being disturbed by the presence of kids and 
more bikes and more traffic heading to the Exploratorium in the near future. 
As part of the community there, they've talked about it and look forward to, in 
five years, when it will be open and prosperous. He also had an opportunity to 
go inside the pier and notice that there isn't any structure that is rising above 
the apparently 40-foot height limit. He thinks that the glass walls at the end of 
the pier will be very distinctive. As a professional photographer, he looks 
forward to photographing that subject in the near future. 

Sue Lee, executive director of the Chinese Historical Society of America, 
indicated that the CHSA is located in the Julia Morgan building on Clay 
Street, which is a very steep hill and not very accessible. She's thrilled that 
the Exploratorium may be locating at Piers 15 and 17. She thinks it's high 
time that the waterfront is activated with something that is non-commercial, 
educational and truly accessible by public transportation. She grew up in this 
area and the waterfront was always a part of their weekends. Today, 
Chinatown is still a residential neighborhood. There are lots of kids, lots of 
families. There are Chinese American families who still come into Chinatown 
on the weekends. All the kids think that Chinatown is a place to buy souvenirs 
and go to Chinese school and eat. It would be wonderful to have a partner 
like the Exploratorium working with the schools and the other cultural 
institutions in the neighborhood and to collaborate. She's thrilled. The fact that 
it's on the F-line not only the kids can come on school trips but they can bring 
their families by public transportation. 

Mike Theriault, SF Building & Trades Council, indicated that this is about as 
mom and apple pie as a project in San Francisco can possibly be. This is a 
public institution that does great work. Unfortunately for quite a while, in its 
present incarnation, it's been located in a part of the city that's not easy for 
M081 12009 

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most of people to access by public transportation. His wife chairs the science 
department at Balboa High School. She's taken advantage of the classes 
offered to teachers at the Exploratorium. Her students, almost all of whom 
rely on public transportation and come from the southern end of the city, it's 
not as accessible for them. In its proposed location on Piers 15 and 17, it will 
be. It'll be a much better place for them, a place much more used by young 
people from the south end of San Francisco. Parenthetically, they'll take the 
work as well; they need it. 

Ernestine Wise indicated that she's pleased with all the progress that this 
project has made. It's been so easy. She wishes that all the other piers would 
have moved along this way. It is terrific and serves the needs of the people. 
As everyone has said, getting to the Exploratorium at this location will be 
accessible by public transportation and the famous F-line, which she's been 
working with MTA to expand because it's so overcrowded and dangerous. 
She hopes that someday we'll have more cars on the F-line that will help 
accommodate everybody. She thanked everybody who took part and worked 
hard on this project especially Jennifer Sobol. 

Commissioner Lazarus asked at what point the water taxi landing will get 
done. 

Ms. Sobol replied that in the agreement, the Exploratorium has up to five 
years to complete the construction. We hope it'll happen earlier, but they need 
some time to secure the funds. They do have an obligation to build a water 
taxi. The Port will operate it. 

B. Informational presentation on the Julv 2009 Draft Preferred Master Plan for 
Pier 70 and July 29. 2009 Pier 70 Communitv Workshop . 

David Beaupre, Planning and Development, provided a follow-up to the July 
14, 2009 presentation to the Commission where he presented the Pier 70 
plan, goals and policies. 

Kathleen Diohep, the development project manager for Pier 70 will be 
covering the implementation section. Mark Paez will be presenting the historic 
preservation and infill development design guidelines. For today, he'd like to 
focus on getting public and Commission's comments on the draft elements of 
the plan and not focus as much on the implementation section. 

Port staff would like to make certain that we have a high level of comfort and 
competence from, not only the Commission, but the community that the plan 
is heading in the direction that we're comfortable with before we move into the 
development solicitation process. This afternoon's presentation will be 
focusing on new information that the Commission didn't receive in July and to 
provide a summary of the community workshop that was held on July 29, 
2009. There were in excess of 100 people who attended the workshop, 
including Commissioner Shakofsky and Commissioner Brandon. 

M081 12009 

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staff appreciate everyone's participation at the workshop. This illustration 
exhibits the project area boundary, which is bounded by Mariposa Street on 
the north, 22nd Street on the south, Illinois Street on the west. Pier 70 is 
approximately a 65-acre site that was established in the mid-1 800s for 
industrial operations and ship repair and is often recognized as the most 
significant industrial complex west of the Mississippi that continues to be 
utilized for ship repair. 

The vision for Pier 70 is to create a vital, inviting district at Pier 70 that 
integrates historic rehabilitation, activates new waterfront open spaces, 
creates a new job center and generates revenues critical to realize the public 
benefits and supports a continuing ship repair industry. These are the same 
goals and the same vision that was presented to the Commission in July and 
what was presented at the workshop and was very well received. The goals 
are to create a National Register Historic District, to preserve the long-term 
viability of the ship repair industry. 

As part of developing the plan. Port staff worked with BAE systems, who have 
since developed their own master plan for their leasehold area, which has 
been integrated into the plan, to create major new shoreline open spaces, to 
extend the city street grid, to provide new sites for office, research and 
emerging technologies that will support the ultimate development of the site, 
to develop a thriving district that recalls Pier 70's historic activity, to promote 
development that is pedestrian oriented and fosters utilization of alternative 
and sustainable modes of transportation, promote sustainable mixed-use 
development and remediate environmental and contamination where 
necessary to support the program of the plan. 

This exhibit illustrates the existing buildings (highlighted in orange) that are 
currently at Pier 70. The green buildings are the buildings that once existed at 
the peak time of its development in 1945. This establishes a design 
framework for the master plan and illustrates the level of density and activity 
that once occurred on Pier 70. 

This exhibit illustrates the historic buildings that are in the site with the various 
ratings, as previously discussed. We went to a higher level of grain abrading 
the resources to help establish a prioritization of the plan. The dark red 
buildings are the very significant buildings primarily focused on 20th Street. 
The medium red are the significant resources. The pink resources are the 
context resources. All of which, when combined, will provide for a National 
Historic District for Pier 70. 

He showed some images of those historic buildings with the Union Ironworks 
Machine Shop, building 1 13 on the top left, the Bethlehem Steel 
Administration building on the bottom left, the Union Ironworks Administration 
on the top right and the recent Ironworks on the bottom right. 



M08112009 

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This graphic illustrates the general framework and parameters for Pier 70. It 
includes 15 acres for ship repair in purple. The historic resources identified for 
preservation that will eventually lead to a National Historic District. The green 
indicates the shoreline and internal open spaces, new parks and open 
spaces, which includes about 1 1 acres of waterfront open spaces and 
additional nine acres of internal open space. 

The yellow indicates new building pads that could accommodate up to 
approximately three million square feet of new development. Finally, the new 
roadway and infrastructure system shown through the roadways. Included 
would be environmental remediation as required to support the plan. 

He showed the illustration with a bit more vibrant colors but also indicates the 
orange area and the historic core that will be part of Pier 70 that will attract 
the general public down to the site and provide some kind of civic soul to the 
site. Kathleen Diohep will talk a little bit more about our strategy for the reuse 
of building 113, the Union Ironworks. 

He showed an illustration of what 20th Street could eventually look like with 
the Union Ironworks building on the right. Again, this plan was illustrated 
before but it shows ideas for the adaptive reuse of the buildings, to activate 
20th Street with commercial activity on the ground level and lower levels, 
looking at doing a publicly-oriented use in building 113, creating a courtyard 
behind 113 that would be a gathering space and then the adaptive reuse for 
office and other uses on the upper levels of the 1 14 through 115 buildings. 

He showed a picture of the inside of building 113, the Union Ironworks 
Building and an illustration of how the courtyard behind 113 could be 
activated for a publicly oriented use. 

The illustration shows kind of that framework plan with how we would 
integrate view connections through the site, pedestrian connections between 
the open spaces and to the waterfront, an extension of the street grid and 
how the plan recognizes future development to the south and the Mirant 
parcel and how Pier 70 would integrate with that. 

The illustration begins to illustrate the type of density that's required to 
support the program for Pier 70, what some of the existing heights are on the 
site and what type of density would be required to meet the three million 
square feet of new development to support all the public benefits and to meet 
the program objectives of the site. 

The illustration is just one way of meeting the master plan concept framework. 
There could be other concepts on how the heights of new buildings are 
programmed on the site or how the layout of new buildings would be 
programmed on the site. This reflects one alternative of how to complete new 
infill development that's compatible with the historic district of the site. 

M081 12009 

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Mark Paez is going to talk a little bit about tiie infill design criteria and how 
new development needs to meet with those objectives and criteria. He 
showed some 3-D renderings of how that new infill development relates to the 
historic structures on the site and how it would be compatible with the 
National Historic District. 

Mr. Beaupre covered some of the comments from the July 29, 2009 public 
workshop under the land use, urban design, transportation and new 
development. First of all, there is some suggestion that the plan isn't articulate 
enough about how we're going to deal with building heights. In the illustration, 
we had a series of buildings that were 90-feet high. It was just a suggestion at 
the level of density that we need. Within the plan, there needs to be flexibility 
and that we need that amount of density, but it could be reconfigured within 
the site in various means. We could eliminate a building and add heights to 
the other buildings. We could eliminate one building and make another 
building twice as high. We can work within the infill development criteria to 
develop something that's suitable for the site. There was a suggestion that the 
language in the plan needed to be strengthened to articulate that. We also 
heard that the plan should encourage a range of heights to avoid the Mission 
Bay sameness of just a single height across the board. The plan should 
balance the types of uses to avoid having too much UCSF Hospital types of 
uses creep into the site. 

There was a very positive response to the plan's focus on the use of bikes, 
transit and pedestrian transportation modes and that the plan should 
recognize and allow for the continued use of artists at Pier 70, which have 
been a long term use within Pier 70. There is a group of artists within the 
Noonan building that want to be recognized within the plan itself as a possible 
future use within Pier 70. 

Lastly, the plan should specify or identify a space that would provide for 
interpretation for Pier 70's rich maritime and industrial history. 

Mark Paez, Planning and Development, talked about the infill development 
criteria that the team worked on. The purpose of the criteria is to inform the 
design of new development to make certain that it's compatible with the 
historic setting of the site, to make sure that it supports and builds upon the 
historic integrity of the historic district. This exercise that the team went 
through came up with seven design-related objectives and policies. 

Essentially, what these policies call for is, one, to respect the district as a 
historic landscape that is the result of 150 years of maritime history, also to 
embrace the industrial heritage of the site, showcasing district resources, 
landscape features and its waterfront location, all of which are really important 
to its identity. 

We wanted to recognize the patterns that are reflected in the site and the 
unique spatial relationships that are found within the historic district as well as 

M08112009 

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allowing for diversity of architectural styles in the new development that 
complements the area and that promotes its active use. 

We want to encourage design and new development that responds to the 
historic qualities of the site while providing the strong connections to the 
surrounding neighborhood of Dogpatch in the central waterfront, as well as to 
provide access to the bay and connect the future public access areas and 
park spaces and integrates them well with the new development. 

These objectives provide a policy framework to assist the Port to manage the 
character of the district as new development occurs. From those objectives 
and policies, we came up with two types of general, district-wide criteria and 
then zone-specific criteria that deal with specific areas of the property. Based 
on these objectives, we came up with performance-based criteria. They're not 
prescriptive because we wanted to provide for the level of flexibility that we 
believe that the plan needs and that will address changing needs that occur 
over time but, at the same time, are responsive to our historic preservation 
goals and the character integrity of the site. 

The district-wide criteria called for a design that will reflect the contemporary 
purpose of the structure and, in so doing, provide an appropriate level of 
authenticity compatible with the historic district and avoid false historicism as 
well as new development that promotes the strong industrial character of the 
site, a level of quality that complements the surrounding historic resources 
and that will stand the test of time. Further, the criteria recognize that there's a 
need to respect the spatial relationships of the resources to one another other 
and to their historic setting. 

In terms of the specific zones, we identified four of them. We came up with 
specific criteria to articulate what should happen in those areas in terms of 
new development and, of course, recognizing that these four areas are 
essentially the development portions of the property where the significant 
amount of new development can occur. 

In zone one being the yellow, we recognize the need for new development to 
respect the views of the iconic building 113 Union Ironworks Machine Shop 
and to be worthy of the architectural quality of the neighboring building 101 at 
the corner of 20th and Illinois. 

In zone two, in the pink, we recognize the need to provide light and air in an 
appropriate setback allowing for some views and connections to the bay and 
to Slip Number Four, which would be part of the future park providing an 
appropriate context for building 101, building 102 and building 104. 

In zone three, which is the orange, we recognize that the building 12 complex, 
being the former historic plate shop, should be maintained as the centerpiece 
for new development and that there should be appropriate setbacks from 

M08112009 

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neighboring buildings. We also set heights there that would be in keeping with 
warehouse number 2, which is just to the north. 

In zone number four, being the blue, we recognize the importance of 
maintaining the historic pattern and form of the former slipways that connect 
building 12 and help to understand its function and how it related and 
supported vessel fabrication and the connection to the bay. Those are 
essentially the characteristics that we were trying to focus on. 

Through the application of these specific criteria, we believe that the plan can 
provide guidance to new development, to help make it responsive and 
complementary to the historic district and the preservation goals for the site. 

What we were trying to do is to differentiate between the Secretary of the 
Interior Standards, which provide a detailed guidance on how to deal with 
historic materials and existing historic resources and how to deal with space 
essentially in a historic district where there are opportunities and challenges 
for new development. 

There were three main comments on the preservation aspects at the public 
workshop. The first was why are there guidelines for infill development but not 
specific guidelines for the rehabilitation of the buildings? We do think that 
there is more guidance that's necessary in a historic district where the 
Secretary of the Interior Standards don't really provide that. Essentially, we're 
trying to integrate the development and the recognition in the National 
Register of Historic District. To balance is to be able to show that we can 
actually achieve what we set out to do in the plan and not in any way harm 
the character-defining features that make that district significant. 

Secondly, the question was asked, to what extent can the resources be 
altered to accommodate new uses and infill development within the district? 
The National Register of Historic District provides a level of flexibility. 

This question came up at a previous meeting where he stated that there is 
nothing about the designation of the historic district that forbids alteration or, 
to remove a resource or relocate it. There is flexibility in the designation 
process. 

At the end of the day, what we're looking for is balancing. The plan essentially 
calls for the rehabilitation of all of the very significant and significant resources 
and then focuses the intervention in the site on the vacant areas and on those 
resources that are at the lowest level of significance. The other important 
aspect of the historic district is that it provides the access to the federal 
rehabilitation tax credits. 

Lastly, there were suggestions for uses in the Union Ironworks Machine 
Shop, building 113, 114. There were suggestions that a museum, an 
interpretative center, a cultural center for the arts, a European-style public 

M08112009 

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market, industrial art production and fabrication or a combination of several of 
these types of uses. 

David Beaupre indicated that one other element to the infill development 
guidelines was how the plan addresses sustainability. While the sustainability 
practices are articulated within the plan, some of them are inherent within the 
plan and aren't really called out. 

There are some sustainable development practices that we thinl< are applied 
to Pier 70. One, that it's an in-fill development parcel. It's within an urban 
area. That's a sustainable building practice. It's adaptive reuse of historic 
buildings, recycling old ones. That's a very sustainable practice. We're talking 
about environmental remediation of a brown field site that would allow new 
development that's sustainable. Reliance on public transit, alternative storm 
water management systems that'll be consistent with our storm water design 
guidelines. Looking at alternative energy sources, whether it's wind or solar, 
developing climate adaptation strategies, recognizing that it's on a waterfront 
parcel and that we need to recognize the potential for sea level rising. 

With regards to open space and transportation and how it relates to the plan, 
Mr. Beaupre showed a map illustrating the two significant waterfront open 
spaces, one often referred to as Crane Cove Park, the other identified as 
Slipway Park. They are approximately 1 1 acres combined. 

In addition, there are plazas, internal passageways that create an additional 
nine acres of park. We talked about integrating the Bay Trail and the Blue 
Greenway throughout the site and providing connections to the south. That's 
illustrated in this diagram. 

The next few slides are illustrations that were done that show how some of 
the open spaces could be developed, such as Crane Cove Park. This is 
Crane Cove Park looking at the water. These are concepts that were done as 
part of the 2001 development proposal, but we just recycled them. 

Again, another idea for Crane Cove Park. Some of the comments that came 
up in the workshop were regarding open space and environmental 
remediation. Those comments were that the park should include some habitat 
restoration, include a habitat for nesting birds within the park. We thought that 
there may be an opportunity for that within Crane Cove Park. For all of the 
open space programming, we'll be looking at that in more detail as we move 
forward with the Blue Greenway planning. It wouldn't be called out specifically 
in this plan. The small boat access should be located outside the buffer area 
required for ship repair, so that we don't impact their operation. They wanted 
to know how the Pier 70 plan integrates with the city's better streets. Other 
recreational opportunities should be examined and that Slipway Park needs 
to be activated, so that it doesn't appear to be isolated. Some suggested that 
the open space needed to be phased early in the development. 

M081 12009 

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There was some concern about the cost estimates for the environmental 
remediation. With regard to the transit, the plan proposes that we provide for 
a new ferry terminal that could provide access to Mission Bay and be 
potentially connected to BART and Caltrain, which is located at 22nd Street 
and Interstate 280. There's the Third Street light rail. There's a future potential 
for a stop on Illinois Street for the Third Street light rail. 

This exhibit illustrates the continuation of the city street grid and how we could 
distribute the structured parking on the site. The plan calls for one space per 
1 ,000 square feet of new office and development, which is an appropriate 
amount for a sustainable project like this. 

Kathleen Diohep, Planning and Development showed a list of the kinds of 
users that we think could use this space in the long run. Pier 70 is going to be 
developed over a period of time, over a couple of market cycles. We want to 
be ready to absorb a chunk of biotech or general office when those demands 
in the market come back. We've done the cost estimating and the financial 
projections sort of assuming things happen evenly over time. What will 
actually happen will be responding to market cycles. We did a long-run 
market study looking at the demand. Seeing San Francisco, we sense that 
Pier 70 may fall after Mission Bay finishes building up in the cycle depending 
on the value of various sites. Within the adaptive reuse, these are where the 
specialized users can come in, particularly for the machine shop. We want to 
have something that respects the grandeur scale of that building, something 
that is publicly oriented. We think that could be a music hall. It could be a 
market hall. It could be for a mason-esque thing. 

Challenged with almost all of these, they struggle to generate enough 
revenue to cover their operating costs. Securing the capital budget to do a 
$50 million rehab would be a challenge and would require Port staff to come 
up with some innovative solutions. We think that, in part of the overall 
financial structure, there would be a way to do that, a way to potentially bring 
in philanthropic assistance. 

If it was 2010 rather than 2004 that the Exploratorium approached the Port, 
we might have been suggesting Pier 70. We've run the numbers. We've 
looked at the financial feasibility. The general answer is very similar in some 
sense to what we showed the Port Commission last summer that it's a tight 
project. This is not currently looking like it's going to be a home-run, neither 
immediately for the Port or for the developer but we want to balance all of 
these public goods with some well chosen development sites and 
opportunities. 

We ran the model looking at a developer coming in, thinking they were going 
to do the economics flow for the 50-acre site. The shipyard stays as the port 
tenant and we will keep working with them and them doing their project. 



M081 12009 

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In the financial projections, the developer funds the parks, the roads, the 
infrastructure and undertakes the development parlance. That's the horizontal 
development. We also have them undertaking the historic rehabilitation, so 
the vertical development on the historic buildings is included in these costs 
and the revenues. 

They would then sublease the development sites, the yellow pads that David 
just showed you to users, to other developers, to people who would build 
those buildings and pay ground rent. The income coming in from the big 
pieces of new development into the model is the ground rent coming in. They 
pay rent to the port. The terms of Prop D, which was the charter amendment 
passed last fall, allow the port a set of special authorities and access to 
financing mechanisms. We have to demonstrate that the site needs those. It 
needs that extraordinary intervention. The rent to the port, if we're going to 
access those funds, can't be any higher than the rent we're getting now, 
which is about $3 million a year excluding the BAE piece. In the model, 
there's the interim leasing revenue. Until we actually move everybody out, 
that $3 million a year or some portion of it is still coming in. 

Capital costs for historic buildings, $350 million. The pier, the waterside, 
about $60 million - these are all in current year dollars. The infrastructure of 
the site, $70 million. The parking, after considering charge fee parking here. 
This would be after the revenues. We have building parking late in the 
program because, in the beginning, we'll have land to park on. Parks and 
open space, that's at $30 million. Then, site remediation at $20 million for a 
total of $570 million of capital costs. 

Remediation is in several places in these numbers, the parks and open 
space. Open space includes some of the remediation costs of doing that park 
land. The site remediation is the development pads and the buildings, the 
extraordinary costs of taking out portions of contamination, doing vapor 
barriers. Treadwell and Rollo has done a risk assessment study for the Port, 
looked at what they know on the site. This is before all the testing results 
come out and came up with a weighting and an estimate of about $28 million 
of expected value of remediation. Between the $20 we have for these sites 
and the portion that's in parks and rec, that's how that remediation costs. 

In that as well is there's $50 million in the historic buildings, which is related to 
asbestos and lead paint that essentially have to get done when you do the 
building. So it's better to carry the cost in that manner. 

So where do we get the money from? We've been working on securing public 
financing. The Prop A bond, we were assuming $10 million of park funds. 
This is the only public funds in the Pier 70 case that aren't essentially a result 
of the development. This is money that's coming form broad general fund 
financing. Prop D, the bonds, is capitalizing that 75 percent of the growth in 
payroll taxes from the site. That occurs because new users come in, because 
the private sector development happens. 

M081 12009 

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Land secured bonds, this is a Mello Roos. We set up a system to tax those 
new users. They pay more in property taxes to help fund and spread the cost 
of the infrastructure over time but it allows us to access a public sector cost of 
debt. 

IFD district is a way we tap in and access the property taxes. Historic tax 
credit ends up functioning as a cost reduction on a historic cost side to the 
project. So we have, from the public side, $310 million. 

Lool<ing at what's the balance - we have $570 million. In addition to the $570 
million capital, we're going to pay the port rent. There will have to be some 
monitoring of the mediation and we end up over 30 years, $660 million of 
cost. The $310 million that we have then, we get into the revenues from the 
private development, the lease revenues. The revenues from people paying 
for the real estate. The ground lease, we expect at $210 million. The historic 
building space list is at $260 million. The interim revenue until it fades out, 
until we turn over the whole site. We have a total of $490 million in revenue 
from the real estate leasing. We end up with $800 million in revenue and 
$660 million in cost. You thinl< we're doing okay. We've got a project. 

The challenge of it, as we saw in that earlier graph, was the cost happens in 
the front. The revenues happen at the end. So we've got to lool< at how do 
you finance that? We've done what we can to bring in public monies and 
access to public debt. This is looking at that same cost stream summarized 
in net present value, which looks at the return, the private sector demand on 
return on capital. So at this level, we have $270 million cost and $220 million 
of revenues looking at a 15-percent discount rate. 

We have a $50 million project gap. We think that's manageable. We've run 
some sensitivities. We have some ways to address this. Let me walk through 
how we think we'd be filling the gap. First we could bring in additional public 
or philanthropic funds, which one of these is the measure we have at the 
state right now that would help us access a larger share of the property tax. 
We also could access lower cost debt sources. We've explored ideas if we 
can finance some of the infrastructure cost in partnership with the PUC or 
other mechanisms that might let us access lower debt. We can also sharpen 
the cost estimates in the phasing and timing of expenditures. We feel like, to 
a certain extent, we've taken this in our understanding of the cost as far as we 
and our diligent consulting team and all can go, as the public sector landlord. 

We need to bring kind of that private sector market sense and acumen to 
knowing maybe some of these buildings that we think need $20 million of 
cost. If somebody who sharpens it, changes their use, can do it for less and 
get a different rent, we want to bring that in. We also may be able to phase 
some of these costs, so that some of them can wait until later into the 
development. We can reduce the risks. So we might not need as high of a 
return to the private sector money partly by getting through the process. 

M08112009 

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An anchor user can really create a momentum. Like UCSF, in some sense, 
anchored and brought into Mission Bay. There are ways in which Lucas has 
done that to the Presidio. Those could change our timing and our absorption. 
The trick for that is to have those entitlements and those approvals and to be 
ready, so we can respond when there's a need. Then, approving land values. 
Land is the thing that cycles the most with the economic cycle, so that, when 
we're ready and we if we can have space when the market's ready. 

Other aspects of the implementation strategy: we have to work with a whole 
number of partners. Pier 70 is it's not a project the port can do alone. It's not a 
project a port can say, "Hey, developer. You come on. We'll help you. You 
can do it alone." We've got to work with a whole range of public partners and 
leadership and really moving this fonA/ard. We've had a lot of success in 
doing that to date within the Prop D and the infrastructure financing legislation 
and others. We need to realign the trust with the State Lands Commission 
and the state legislature. We've done work with them. We think we've got an 
agreement that there's enough areas that, within Pier 70, we can realign the 
lines and have the flexibility to do these high revenue uses, such as office or 
biotech or others. 

The Regional Water Board has the oversight on the environmental. The Park 
Service and the Office of Historic Preservation will be our partners on the 
historic district listing and the historic tax credit certification. BCDC, working 
with them on the shoreline ban. 

The Board of Supervisors, the Planning, the Historic Preservation 
commissions of the city will all be involved with the Prop D plans and lease 
approvals. The infrastructure financing district approval will have to go 
through the board. The rezoning of CEQA will involve the Planning 
Commission, the Board and the Historic Preservation. 

Those are the regulatory or administrative hoops and circles and things that 
we'll need to go through. Back on another level with the Mayor, the Board of 
Supervisors and the Port Commission, we're going to be looking for policy 
priorities, attracting our partners and funds and really sustaining this civic 
consensus that we hope we're bringing together with this plan so that we can 
all get to the finish line and revitalize Pier 70. 

Development partners, what we really need is a truly public-private 
partnership. Rather than going out and asking somebody to propose what's 
your vision for Pier 70, we're looking for feedback now from the Port 
Commission, from the community. We're taking it around to other parts of the 
city to present our concept, our vision for Pier 70. What do people think about 
this? That's the substance and the conversation we're looking for this 
summer. What we then want to do is invite for development partners to come 
join us in realizing that vision and working together. 



M081 12009 

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We think that the best way to get there is going to be a collaborative 
partnership. We're going to need specialized expertise going forward. We 
also really want to build on the balancing and the work and the consensus 
that we think we've achieved with the plan. 

We think that the Union Ironworks building as one building is going to be a 
key use. We may want to outreach somewhat separately or be available 
ready for users that would be part of that but we know that that project can't 
happen alone. It has to happen in the context of the whole area being 
upgraded in the infrastructure. So the plan is to come back to you in the fall 
with recommendations on how we go out for partners but to engage the 
community, the development community, yourselves and others with the 
conversation of, do we have this vision right, so we can ask somebody to 
come and help us implement it, which is a somewhat different structure than 
going back and asking the development committee what do you want to do 
with Pier 70. We're asking them to join us in this vision. 

David indicated that there was a huge Port team working on this project 
besides himself, Kathleen and Mark. He thanked Monique Moyer, Byron 
Rhett, Diane Oshima, Jonathan Stern, Carol Bach, Brad Benson, Gerry 
Roybal and Joanne Sakai as well as multiple other folks within the Port who 
helped out and other agencies throughout the city. 

Next steps - We're aiming to have a Central Waterfront Advisory Group 
(CWAG) meeting on August 26, 2009 so they can weigh in, specifically on the 
comments. The public comment deadline is set at the end of August but it 
might be extended dependent upon CWAG's ability to provide some 
comments. We want to give plenty of time for the public to comment so that 
we can have consensus on this plan early in the fall. 

On September 2, 2009, we're planning on a SPUR brown bag. Tomorrow 
night, August 12, he is going to the San Francisco Tomorrow Board to 
present the plan. We're working with the Planning Department to arrange 
presentations to the Planning commission and Historic Preservation 
commission. We're aiming to finalize the plan in the fall and come back to the 
Port Commission and present the solicitation options moving forward. There 
are plenty of ways to comment for the general public. The website is 
interactive. They can comment directly online. They can comment to David 
Beaupre via email. He's also received letters. There is more information about 
the entire Pier 70 planning process and all of the background information on 
the Pier 70 website. 

Corinne Woods, member of the Port's Central Waterfront Advisory Group, 
among other things and have been working on the Pier 70 project for 
probably 10 years, indicated that this public process is excellent. The 
workshop was very well attended. There was a lot of response. The staff was 
very available to listen to comments. She thinks that the draft master plan is 
extremely well organized in terms of the ability to read it, understand it and 

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respond to it. She will be sending in her comments, which is currently about 
three pages long. In the meantime, having worked on Mission Bay for the last 
10 years, the idea of a design for development that gives flexible land uses 
but essentially outlines what the minimums and maximums are could give the 
Port an opportunity to, over time, evolve the plan, depending on what 
happens at Mirant. It's going to happen in phases. Nobody is going to do 65 
acres at one time. Watching Mission Bay as it evolved, everything takes 
forever. Infrastructure takes forever. You can't have transit till you have roads. 
You can't have roads until you have sewers. A phasing plan is critically 
important. One of the things that the Port should do early is become part of 
the EN trips. Eastern Neighborhoods Transportation Planning 
Implementation, which is through MTA's jurisdiction. There is also a public 
community outreach process. One of the things that we're going to need early 
on to make Pier 70 work is transit. There's a potential new transit line 
between Caltrain, 22nd Street station and Pier 70 in the transportation TEP 
but it needs advocacy. Getting the E-line is going to take advocacy. She'd like 
the Port to engage with them in the EN trips process. 

Commissioner Fong thanked the presenters and commented that he looks 
forward to more. 

11. NEW BUSINESS / AGENDA SETTING 

Monique Moyer indicated that with respect to the agenda setting, the Port 
Commission adopted an ADA transition plan more than five years ago. Staff will 
provide an update on the plan at the September 22 meeting. As the Commission 
heard several times today, the main items for the next meeting relate to the 
Exploratorium approvals. By the September 22nd meeting, we'll have other 
business to bring to the Commission. It's pretty straightforward at the moment. 
David Beaupre will talk more about the Pier 70 master plan. It has to go through 
the CEQA process before the Commission can adopt the plan. In the interim, we 
would like to solicit more comments and get directions from the Commission on the 
next steps. 

12. PUBLIC COMMENT 

Ernestine Weiss announced that the construction on the ferry park will begin at the 
end of August or early September. Everything will be fenced off. There will be no 
more permits issued during that time. Every time she leaves this meeting and 
every time she walks by the Yin and Yang statue, kids climb all over it. The wood 
chips are scattered all over the sidewalks and the surrounding area. It's terrible for 
the Port to allow for such a thing to happen. That statue should be removed and 
placed somewhere else. We should not have permanent art anywhere in the city. 
She asked that the statue be taken out of there because she's sick and tired of 
telling people not to let their children climb on it and desecrate it. She will be 
talking to the Arts Commission about this. She recommends that the Port should 
start the business improvement district. She started the business improvement 

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district at Union Square. It needs to happen on the waterfront because the Port 
needs the funds. 

13. COMMUNICATIONS 

14. ADJOURNMENT 

ACTION: Commissioner Lazarus moved approval; Commissioner Hardeman 
seconded the motion. All of the Commissioners were in favor. 

Commission President Rodney Fong adjourned the meeting at 4:55 p.m. 



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